Does UK manufacturing need more patriotism?

"Make it in Great Britain"  Credit: bisgovuk

At the EEF Manufacturing Conference in London today, Ed Miliband spoke about a need to be more patriotic about manufacturing in the UK.  Unfortunately for the Labour Party leader, protectionism isn’t as easy as it used to be – so how can we be more patriotic without violating our international trade agreements?

Suggestions from Mr Miliband and others include wider use of the “Made in the UK” mark, a greater effort to find acceptable ways for the government to give manufacturers more money (e.g. greater capital allowances), and even better education for the next generation’s workers.

The last suggestion holds considerable promise, though as it stands it is too simplistic.  Education focuses too often on learning what is already known.  Worse still, engineering is considered irrelevant to the country’s success by many, and anti-capitalist protests suggest that among the young, the whole idea of gaining personally by bringing innovation and growth to UK’s manufacturers and services is highly suspect.  By failing to educate young people effectively about the opportunities for social, cultural, and economic advancement for all (as well as individuals) that engineering, innovation, and enterprise bring, we are letting them down.

I recently visited a highly respected and academically league-topping independent school for girls whose syllabus in Design & Technology incorporated only cookery and sewing – not even covering food safety or textile engineering.  The idea that bright young people will somehow learn about innovation, engineering, and related subjects outside the curriculum is fanciful.  A few may be so lucky, but most will not stumble across the right sources of inspiration, and will presumably grow up considering technology to be wholly irrelevant to them.

What should we be doing?  First, young people need to learn about the mechanics of capitalism, and how money is used for investment, which can drive innovations and advancements that create jobs, better and cheaper products and services, and benefits of all kinds touching every part of our lives.  This sounds like a very basic lesson, but it is one that is clearly missing in the discourse of many young people today.

Second, young people – as early as possible in their education, i.e. primary school – should be introduced to innovation as something that they can get involved in, and where they can have impact.  First Lego League does this for children from the age of 9, involving them not only in Lego robotics (a good draw), but also in product and service innovation projects which have nothing to do with plastic bricks.  An engineer involved as a referee remarked to me recently that the youngest teams are often the best – and it’s important to capture their interest while they are still young enough to “think outside the box” relatively easily.

Third, and perhaps most difficult of all, we need to teach teachers about manufacturing and industry.  How can we expect them to impart an enthusiasm for an activity of which they have little or no direct experience?  How do we think they will answer their pupil’s questions?  They are no more likely to absorb this understanding by chance from their private reading and hobbies than their students are.

These days, many young people who go into manufacturing learn everything they know on the job, from their colleagues and superiors.  While this is an excellent way to learn, it is not adequate on its own – it ensures that firms carry on doing things exactly the same way they always have.  In order to innovate and compete effectively, manufacturers need employees who have a wider experience and understanding than they can get solely from studying traditional methods and practices.

What does this have to do with sustainable business, the subject of this blog?  For business to be sustainable, it must not rely on government support or protection.  It needs to be able to survive on its own, and to adapt to new conditions.  Ultimately survival depends on the ability to change.  Firms will not be able to do that if their staff think innovation is something other people do, growth is something legislated by governments, and that design and technology are about copying best practices that their elders pass down to them.  UK manufacturing has a proud tradition of radical innovation, risk-taking in investments, and visionary change.  If there is anything to be patriotic about it is this – as a cultural entity, UK manufacturing has led the world, and with capable people, can continue to do so.

The truth about imports and emissions

Back in April and May there were a lot of headlines about how the UK isn’t really reducing emissions at all – we’re just transferring emissions to the developing world by importing energy-intensive manufactured goods.  A report by a respected institution, the National Academy of Sciences of the USA, has been cited as solid evidence.  It is solid – but people are drawing the wrong conclusions.

The data does indeed show that when we look at consumption rather than production, emissions in the developed world have indeed grown rather than fallen – by 0.3% per year on average.  Moreover, the fact that global emissions continue to increase is undeniable.  However, we are not simply transferring our emissions to the developing world.  The authors state this – the emissions intensity of trade is actually falling, even as trade grows.   Since 1990, international trade has grown at more than twice the rate of the emissions embodied in that trade. The problem is that we continue to consume more, and we have failed to reduce the emissions of our consumption enough to compensate for our increased appetites.

The real question is this – what should we do about it?  There is a danger that, based on the headlines, policy-makers will conclude that reducing energy-intensive imports is the way forward.  In short, protectionism will become fashionable again.

Of course, as most mainstream economists will tell you, protectionism tends to lead to slower growth – good for emissions, but bad for jobs and wealth.  Fortunately, The Economist, a respected international news and opinion journal, throws cold water on the idea that tariffs could help.  It argues instead that green investment in the developing world is the way forward.

However, all commentators appear to neglect the point that stares at us out of the data – the big emissions opportunities that we in the developed world can tackle are from production destined for domestic consumption.  While it is very difficult to regulate emissions in other countries (tariffs are a very blunt and potentially divisive instrument), it is perfectly possible for countries to regulate the emissions from their own production, most of which is destined for internal markets.  Since this is the largest figure, and the one most conducive to management, it makes sense to focus attention here.

Of course, there is still a strong argument for measuring national emissions based on consumption, not production.  This gives us a more realistic picture of the environmental impacts of our national lifestyles.  Nevertheless, when it comes to making reductions, we should be looking at the big wins that come from production to meet our own needs – this is where we will have the biggest positive impact.