As the recent election made us aware we no longer make anything in the UK. Once we were world dominant, Britannia ruled the waves and our goods exported to every corner of the world, but sadly those days are over. So is it hollow political rhetoric to sell the idea that skills and training are enough to make us competitive again? Will the UK never manufacture anything in the future or could we be about to enter a 3rd industrial revolution and if so how might the UK benefit? Is there another way to look at manufacturing?
First understand why UK slipped from prominence. A litany of factors contributed; arrogance about our dominance, unions that became too powerful keeping wages high, a workforce that maybe grew lazy, lack of the right skills, lack of vision about changing markets, slow to use design, successive government that chose not to support ailing industries and the bosses ignored the future and failed to invest adequately or wisely.
Manufacturing is now less than 14% of GDP and fell from 27% in 1979.
Britain began the first industrial revolution and turned into the workshop to world. We generated this prominence by inventing technologies and using them to make new things in unprecedented volumes, feeding emerging consumer and industrial markets. At first we grew our local market and then began exporting goods globally using the merchant fleet we controlled. The spoils of this trade were used to import, in those same ships, the necessary raw materials, at suitably low prices, to keep our industrial machine going. When that slowed we exported an entire transport infrastructure to India to it grow their economy and give us bigger markets to feed. Then to stoke the machine we exported our technology and knowhow, in areas like automotives and aerospace. But eventually the emerging economies caught us, using those exported technologies and skills, learned in our universities and workplace, added cheap labour and undercut us. And UK manufacturing crumbled. Looking at it this way we must wait until labour costs level out globally and Chinese pay meets ours, before that we cannot hope to compete.
You would be amazed how fast the UK stopped making things. In 30 years entire industries, sets of skills and a myriad of associated suppliers have dissappeared. We no longer make bicycles, motorcycles, cars, aeroplanes, machine tools, mass electronics or consumer goods, it has all evaporated. In 1979 Raleigh made tens of thousands of bicycles, now it is almost impossible to buy anything for a bicycle made the UK. Of course there are exception, Brompton bicycles, Triumph motorcycles, Rolls Royce aero engines and most F1 cars. Studying their success tells an interesting story, they are typically high tech, with strong marketing and brand, they rely on engineering excellence, niche markets, make in low to middle volume and above all else exude quality.
Need we bemoan the loss of these volume industries, I believe the answer is no, just making things should no longer be our goal. To answer why, we must factor in market conditions a couple of decades from now and explore factors that will challenge the current volume sales model.
Things being made in the Far East have to be transported around the globe. Shipping relies on oil and secure seaways, both of which will come under increasing pressure. Energy intensive industry and transportation will increasingly be subjected to carbon taxes and regulated ever harder as we strive to reduce emissions. Thus the advantages of Far East manufacture may diminish, though not so far as reinvigorate old industries here.
As this happens the economics of buy cheap, buy lots and carelessly throw away will seem less attractive. An intangible factor will emerge, the realisation, crudely put, that we have enough ‘stuff’. Once a consumer society matures it becomes more discerning about what it buys, for the simple reason we are more aware of the true cost of ownership of stuff. Cost of ownership balances the cost to buy, the nuisance when things go wrong, the end of life cost of disposal and the realisation of how hard we have have to work to earn in the first place. We realise repairing something cheap is uneconomical if not impossible, yet throwing it away feels morally wrong and will become increasingly difficult when local authorities charge to dispose of old fridges, computers, or plastic nonsense. Such niceties only emerge in matured societies, but where does this leave us in terms of manufacturing?
The clear answer is we need to make fewer items that sell at higher prices to buyers who accept a greater outlay in exchange for less frequent purchase. Design may focus on ensuring items can be repaired and on ways they can be customised, because we want things that better meet our needs. Clearly this is not the Chinese model, they rely on a Henry Ford volume approach that may ill suit this shift in market. Can the Chinese model adapt? I suspect not, far more likely they will choose to serve growing domestic and African markets for as long as they can, such is their reliance on that one model.
If this vision became reality then we can call it the 3rd industrial revolution, the era of quality, longetivity and customisation, a model the UK is ideally poised to embrace.
Let us explore the idea we might buy higher value goods that can be customisation to our needs. Once car manufacturers made custom bodies to each user’s preference, then Henry Ford came along and said one colour fits all. Over the last 30 years the definition of marketing changed from ‘meeting the needs of the user’ to ‘making the user need what we make’, because this version better suits volume manufacturing for global markets. But the ability to customise has seeped back, even in the cheaper ranges of cars and will surely grow.
There is a further pressure. All products inevitably evolve toward an ideal specification, and as they near it they become commodities. A refrigerator should keep things cool as efficiently as possible, a vacuum cleaner should pick up dust efficiently, a music system plays music, a radio tunes into radio stations and a car gets us from A to B. Seen that way they are commodities bought with a clear idea of their specification and function. We don’t shop around for the best bottle of milk or follow the brand leader in milk and upgrade our choice to the latest version. We know what milk is, what we expect of it and what we are prepared to pay, expecting little difference between a pint from the corner shop or the milkman.
Take the latest iPod aimed at runners. It holds 4Gb of music but is hardly larger than a pen. This is fast becoming a commodity because it holds more songs than we can listen to in a whole day so the pressure to go buy a better one holding twice as many songs is marginal. Being so small it is very robust and more likely to get lost than go wrong, whilst its size makes any design qualities virtually meaningless. With commoditisation consumer desirability begins to disappear and the fizzle that spurred consumer demand fades. A purely functional object loses the factors that drive mass consumption, that necessitated built in obsolescence and the pursuit of fashion. Once consumers fail to be impressed by claims of improved specification the item becomes a tool for doing jobs that are valuable to us. Such a tool we are happy to use indefinitely. Think of your best kitchen knife or that perfect potato peeler, do you browse John Lewis kitchenware shelves looking for the latest upgrade or new stylish version? Hardly, you iterate to a choice that suits your need and stick with it; until it gets thrown out with the peelings by accident, or wears out. But supposing you found it easy and cheap to replace the blade or grip, maybe John Lewis could do it on the spot for 1/3rd the price of a new one. What if the manufacturer could fit an extra large grip once your fingers become arthritic? Under those circumstances could you bear to throw this ideal tool away? Seen this way the notion that we would continue to consume, in the way Far East manufacture feeds, seems ridiculous.
Here I list my vision of a virtuous circle of the future of manufacture in the UK as we move into the 3rd industrial revolution.
Our consumer society has fully matured and this changes our approach to the ownership of things around us. For example;
· We become more discerning and learnt to avoid cheap goods that go wrong and can’t be repaired.
· We expect to specify what we want rather than accept what is on offer and extend that principle to many things we need.
· We will compare items on specification, but know that is not everything and visit a few trusted review sites before purchase to help us clarify our needs and ignore overblown claims from manufacturers.
· We expect everything we buy to work well and appreciate that differences in performance and function are probably marginal and
· We hate being left behind by technology and appreciate that upgrading is better than junking so future proofing become part of our specification.
· We want to be convinced at purchase that repair and refurbishment has been thought through and can be handled in a cost effective way.
· We have learnt to take a longer view and see the benefit of a service contract as part of the price.
· We appreciate good design where it makes things meets our needs and support brands that embrace this.
· We see endorsement by a celebrity valuable only if they encompass similar values to us.
· We will increasingly value art and craft and especially enjoy being able to combine beauty and individuality of something made by an artist with practical, functional items.
· Thus we are prepared to pay more for things that suits us better.
· Thus we consume less, use less energy in manufacture, throw away less, need to earn less, reduce our carbon footprint and build a new manufacturing approach that the UK can embrace.
This gives the UK manufacturer hope because it creates two new paradigms; a new type of demand and the increased margins that will allow us to again start making things in the UK again. Not the volume manufacturing of old, but fewer higher value good quality long lasting items that we grow to value and trust. The 3rd Industrial Revolution will see manufacturers using versatile but cheap computer based manufacturing systems able to customise and adapt products to suit the individual user, the potential for this being designing in at the start. They will use web based selling tools to attract orders from all around the world, have sales tools that capture user choice. They would offer the basic product specification to designers and craftsmen allowing them to customise the design as they see fit and offer these versions to buyers at a small premium with a royalty going to the designer. That way we might coordinate all sorts of items in our home under the design vision of an individual we admire. All shops will offer the type of service we currently get from John Lewis but with the addition of meaningful no haggle warranty and the on-site service capability of a Mercedes garage.
In Morocco they reinvent the wheel. The wheel of a new moped that takes a rich man to work becomes the wheel of a poorer man’s moped to carry his family to the beach on Sunday. It then drives a cart that transports goods to market, a pair became the wheels of a trolley to deliver tourist’s luggage. Finally it becomes the pivot of a potter’s wheel on which a sand blown desert town makes a living selling ceramics in the markets. We don’t need to reinvent our model of consumption, once it existed in the UK and it exist around the world now in less developed economies. When trying to explore these ideas the usual response is ‘how will people earn if you slow down the economy of consumption?’ The answer is you change the nature of consumption and in doing so create the 3rd Industrial Revolution.
