Quote:
Originally Posted by denphone
As Hugh says its not as simple as many think to build up our manufacturing base again against such fierce competition and lower prices abroad.
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There was once a time when Britain used to be the workshop of the world but we priced ourselves out of the market with the result that we were superseded by China, Taiwan etc.
Because we bought from these countries they were able to build up their manufacturing base at the expense of ours so our manufacturing base declined. Cheapness of price is not everything.
If we want a return to manufacturing in Britain and the jobs associated with it we will have to get back to the habit of "Buying British" and being prepared to pay a little more bearing in mind that British companies will be paying UK tax which can be re-invested in our manufacturing base. It also puts the onus on British manufacturers coming up with creative ranges of well designed, high quality, high value products at an affordable price.
It will no doubt take some time but China's rise to power did not happen overnight nor should that deter us from trying to rebuild our manufacturing base.
In the beginning it may well be that instead of large, expensive factories we use a cottage industry style of development with small units being run on economic lines. Or we could combine a human work force with an automated one etc.
We could start with small products like nails, of which we import quite a lot though there may well be larger products worthy of manufacture. Much of the development will come from entrepreneurs coming up with creative ways of adding value to a product at a low cost, using creative designs and innovation for example.
We can make our products more desirable to others in terms of cost if we sell to our home market at a slightly higher price that that used for exports.
The whole point is that if we do not make a start on rebuilding our manufacturing base we will always have an unbalanced economy totally reliant on the success of financial services. Diversification is the way that we reduce risk so that if one part of the economy fails we do not take a major hit.
It also helps us to reduce and redress our balance of trade so that we are less dependant on others for our goods and services.