One of the most frequent complaints heard whenever the state of the economy is discussed is that Britain “doesn’t make anything anymore”. Thankfully, this “trueism” is anything but true.
The UK is still a global manufacturing power: it is the world’s second biggest aerospace manufacturer, the world’s second biggest defence exporter and one of Europe’s biggest carmakers.
Most forecasts suggest that next year the UK will produce more cars than ever before. Not bad for a country that doesn’t make anything.
For the UK’s manufacturing heartland, the West Midlands, making things still remains the driving force behind much of the region’s economic growth.
Iconic companies with homes in the region like Jaguar Land Rover and JCB are leading a growing army of companies that are opening new markets and increasingly selling manufactured goods ,”made in the West Midlands”, to eager customers around the world.
The clearest example of this is the amazing statistic that the West Midlands, with a population of six million people, has a trade surplus with China, a manufacturing and exporting nation of 1.3 billion people. Last year, the West Midlands trade surplus to China was an incredible £1.74 billion with the figure set to grow this year.
Across the world, consumers want goods and products made in the West Midlands. The region also exports more to the US than any other region outside the US and Birmingham’s traditional reputation as a gateway to Europe is now firmly established as a gateway to the wider world.
Despite UK manufacturing contributing less to total GDP than it did 40 years ago, the importance of making things should not be lost. In our region, local manufacturing growth has been outstanding. Last year, the Manufacturing Advisory Service (MAS), said growth of up to 10 per cent among businesses in the region was the “norm”.
This is subsequently driving growth in inward investment, with the “World’s Most Competitive Cities Report 2015” ranking Birmingham as the highest-performing city in Western Europe for its competitiveness in attracting inward investment, comfortably beating cities such as Barcelona, Berlin and Dublin, an accolade which would surprise many.
Existing companies are also growing, with Jaguar Land Rover recently unveiling ambitious expansion plans to create thousands of new jobs and generate millions of pounds worth of new investment.
So Birmingham and the West Midlands in general is well placed to drive long term manufacturing growth in the UK, but it is now vital to build on the recent growth and to ensure that this manufacturing renaissance is firmly rooted in the economy of the future.
New technologies, including 3D printing, are likely to transform manufacturing in the next decade and as an economy we need to ensure that our workforce has the skills necessary to embrace the coming technological shift.
However, manufacturing companies already complain that they can’t get skills they need, and the skills gap in the West Midlands is particularly acute.
Last year one in five job vacancies was due to a skills shortage, with the West Midlands above the national average when it came to worrying about or experiencing skills shortages, with 54.8 per cent of firms reporting shortages.
We must address this quickly to ensure that our education system is geared towards the skills that are needed in the local economy and that people are given the opportunity to learn new skills and adapt to changes in the local economy.
Germany does this particularly well, and in doing so ensures that there is a pool of talent trained in specific manufacturing expertise.
We also need to make manufacturing exciting to school children, so they want a career in it. There is no shortage of wonder or excitement when kids see modern, high-tech manufacturing facilities, but far too few want to study for a career in it.
We need to change that and make manufacturing exciting again.
Transport links are also key to promoting British manufacturing. Whilst London continues to debate Heathrow expansion, it is no surprise that Birmingham airport is growing rapidly and it’s increased links are helping the region’s businesses to access emerging growth markets. The newly-created Birmingham to Beijing link will geneate £19 million for the wider regional economy.
Strengthening rail links also helps to support manufacturing growth: we need far better rail access to the ports from our manufacturing heartlands.
This should include upgrading the freight line between Felixstowe and Birmingham, which would allow far more capacity on the line and prepare the region and the country well for future manufacturing growth, which could well otherwise be constrained.