Observations

By Peter Marsh Escorting his visitor past an array of expensive machine tools ,Damon de Laszlo explains why he has avoided seeking a public listing for his engineering company. "I'd have to start justifying my spending on investment and innovation to a board of directors," he says. "And they might be a pain in the neck." Mr de Laszlo is disdainful of many public companies that he says are run in a woefully short term manner. "If I didn't spend £1m to £2m a year on equipment and other capital investments I'd increase profits significantly, but in the longer term the company would fall apart. The inhibition at board level [ in many public companies] is enormous." The blunt speaking Mr de Lazslo is chief executive and owner of Harwin, a company based near Portsmouth in Southern England. Harwin is a global leader in a niche area of electronics - making tiny connectors for plugging together circuitry in a range of products from aircraft control systems to fire alarms. Harwin makes its connectors - built up from collections of wires and precisely machined metal and plastic components - in 50,000 varieties. Of its revenues last year of nearly £19m, 60 per cent was exported. Mr de Laszlo reckons Harwin is on course to reach annual sales of £30m in the next three years. Mr de Laszlo and his company are at the sharp end of the debate about whether private companies run by families or stable groups of investors can perform better than the familiar stock market-quoted business where shareholders can - and sometimes do - switch in and out of ownership continuously. The discussion is particularly pointed where the companies - as in Harwin's

By Peter Marsh Britain does a poor job in conveying modern views of engineering to young people and encouraging more of them to choose it as a career, according to a hard hitting assessment of the decades-old struggle in Britain to update public perceptions of the discipline. "The lack of engineers in positions of influence in society is mirrored by a lack of understanding of the importance of engineering and the role engineers play, compounded by our inability to communicate that engineering is exciting," says an authoritative report by a top barrister and civil engineer. In the study Prof John Uff highlights "the importance of marketing [of engineering related subjects] in addressing misperceptions and prompting enquiry" but says this is inadequately addressed in many schemes operated either by the engineering profession or educational groups. "STEM [science, technology, engineering and mathematics] options are, for some young people, loaded with perceptions of limitations," the report says. Uff lays much of the blame at the door of Britain's 35 official engineering institutions – of which the three biggest commissioned his inquiry. The institutions are said in the study to be "inward facing, elitist and insular" and "do little to engage with the wider engineering community or with society at large". The professor singles out for rebuke the promotional body EngineeringUK. "Serious criticisms have been voiced as to the performance and outcomes achieved by EngineeringUK in its educational activities, which are criticised as ineffective, particularly the campaigns to inspire school children to take up STEM studies… The UK remains woefully behind international competitors in recruiting potential engineers." The report says: "Allowing for the fact that EngineeringUK has only been operating since 2010, the question still arises why, despite some

Britain has improved its position among the world’s top manufacturing nations, moving up the league table to its strongest position since 2008 The UK was the world's eighth-biggest nation by manufacturing output in 2015 – the most recent year for which internationally comparable data are available – with just over 2 per cent of total output, according to calculations by Made Here Now based on the latest figures from the United Nations' statistical database. The numbers underline the relative strength of Britain's position in world manufacturing, even in the face of the rapid advances over the past 20 years by developing nations led by China, which claimed the largest share of world manufacturing in 2015 followed by the US, Japan, Germany, South Korea, India and Italy. "This performance reflects the renaissance that manufacturing is currently undertaking through a consistent focus on innovation, research and development and high-value skills," said Terry Scuoler, chief executive of the EEF manufacturers' body. Made Here Now plans to highlight the opportunities ahead, focusing especially on the potential role for younger people, whom many companies say they want to recruit to develop skills and technologies in fields such as digital factories, artificial intelligence and 3D printing. While some industry experts fear that the UK's planned exit from the European Union will weaken British manufacturing, others believe that Brexit provides the opportunity to boost the sector, perhaps helped by the government's much vaunted new industrial strategy. The UN data provide a snapshot of different countries' relative strengths in manufacturing output, registered as shares of total value-added production calculated at 2015 dollar values. The figures provide a unique way to compare the performance of countries since 1970. In 2015 world manufacturing output came

Book Review: Steel 2050: How Steel Transformed the World and Now Must Transform Itself Rod Beddows has an immense amount of knowledge and experience about the steel industry and this comes through in this book. He has achieved one of the prime aims he has set out to accomplish: to give a young person just setting out in the sector a primer about the business's evolution and key ideas for the future.  He does this very well. I liked the historical material about how the steel industry has reached its current position of being a key supplier to just about every part of the global economy - but with technology and experience having driven down prices so much that the industry today struggles to make any money. There are some good points too about how the industry needs to change: for instance how it has to do better at offering a good service to its customers. In this book, Beddows has also produced some valuable insights into how steel is used that challenge conventional ways of looking at this. For instance, he analyses  "steel intensity" as it is usually measured. This is done by consulting statistics about shipped material. Steel intensity per person is normally regarded as the total amount of steel in a basic metal form that is used each year in a country by head of population. That fails to give the full picture, says the author. The right way to do this is to count several factors often ignored by the statisticians. They include steel contained in goods that may be imported. That means the steel is used indirectly by consumers and industry in a specific nation, without anyone in that country

By Peter Marsh A new website to tell the world about modern UK  manufacturing has been launched in the setting of a stunning 3D-printed model of London. The project has received support from 47 organisations from business, government and public life. Behind it is the aim to use the best writing, photography and design to paint a more upbeat picture of UK industry than is often seen in most mainstream media. A key aim of www.madeherenow.com is to use a fresh approach in an effort to tempt more young people into the sector. According to many involved with manufacturing industry, children and teenagers are often dissuaded from considering manufacturing as a career choice due to its poor image. The launch took place at New London Architecture in London, against the backdrop of a superb 1:2000 model of London, made using modern techniques including 3D printing. The model was made by Pipers, a small design and events company based in London. The idea of the website was conceived about a year ago. It is a collaboration mainly involving me and two digital agencies based in Manchester - INVENTID and Nine Sixty. The response I picked up at the launch about the website was overwhelmingly positive. "It seems people think MADE HERE NOW is fresh and informative and gives new insights into the sector," I said at the time of the launch. "People interested in manufacturing have for years complained about its poor image. With MADE HERE NOW we may have reached a turning point. It's a great platform to start with as we build the website into something bigger and even better." The first version of the website features four exemplar companies that opened up their

By Peter Marsh On a visit to Seoul to take part in discussions on 21st century manufacturing, I was faced with a number of questions about the ideas in my book “The New industrial Revolution: Consumers, Globalisation and the End of Mass Production". I gave three lectures, two of them at events organised by the Korean Development Institute and the Korea Information Society Development Institute, and the third to a group of students taught by Prof Keun Lee, a prominent Korean economist at Seoul National University. Prof Lee is an authority on industrial policy and “economic catch-up” – how developing nations can close the gap in living standards and incomes with the richer parts of the world. He brought his students to a meeting that I addressed at the Seoul Science and Technology Policy Institute. In these three events, by far the toughest set of questions came from Prof Lee’s students, some of whom are pictured with me here. Here is an edited version of questions and answers from the encounter with the students - along with extracts from other conversations I had in Seoul. (You can see here the slides from the STEPI lecture.) Can you summarise what you mean by the “new industrial revolution”? Over the past 300 years, manufacturing industry has provided the world with the tools for most of its economic growth. There have been four previous industrial revolutions, starting with the changes in late 18th century England driven by advances in areas such as textile engineering and steam power. Subsequent revolutions were about shifts in communications capabilities led by advances such as railways; new science-based disciplines including chemicals and electricity generation; and the post-World War Two development of the electronic

By Peter Marsh In uncertain economic times, many countries are looking to manufacturing to provide useful growth and employment. Barack Obama and David Cameron in the US and UK are both long-time converts to the "pro-manufacturing" argument. Narendra Modi, India’s new-ish prime minister, has espoused a "Make in India" programme to give his country a lift. In Nigeria, Goodluck Jonathan has instituted the "Nigerian Industrial Revolution Plan" to do much the same. A key to all this interest is that the "manufacturing" most nations are interested in is different to the sort of production operations that dominated in the past. Old-style manufacturing in the shape of big, inflexible, polluting factories is not what these countries have in mind. More important are small, nimble companies applying new technologies and business methods. These can be applied to suit the requirements of customers both at home and thousands of kilometres away. A set of new themes are important. They include: “tailoring” goods to meet individual needs; blending different technologies to create new products with outstanding properties; using the power of the internet plus other digital techniques to provided new capabilities; combining production with services; and running factories so as to have a minimal negative impact on the environment. Uniting the old and the new elements is one unchanging characteristic. Manufacturing is at heart very simple: it's about adding value to the world’s limited stock of materials to make useful things. Perhaps this is why the topic remains fascinating, several thousand years after manufacturing in its earliest forms started up. In the light of this interest, it seemed a good time for the Vienna-based United Nations Industrial Development Organisation to organise a five-day training workshop to explore some of

Manufacturing Renaissance Councils: Models for Success? By Thomas Hemphill Americans generally agree that they want their nation to remain the global leader in manufacturing. According to Leadership Wanted: U.S. Public Opinions on Manufacturing, a 2012 national survey, 90% of respondents rated manufacturing as “important” or “very important” for their economic prosperity and America’s standard of living. This survey reinforces the importance of the manufacturing sector to the good health of the American economy. While continuing to expand its productivity over the last two years, the U.S. manufacturing sector has only modestly expanded its employment base. Since December 2011, the Bureau of Labor Statistics has reported an increase of 231,000 manufacturing jobs, for a total of 12,028,000 employed in the sector. Yet the need to develop a long-term, stable supply of next-generation employees for advanced manufacturing industries is a challenge that needs to be undertaken now—not later. With an anticipated surge in retirements from an aging workforce over the next few years, the demand for high-skilled workers will be needed for replacement and continued expansion. There has also been a recent groundswell of business, government, labor, and academic support for the creation of a U.S. manufacturing strategy.... Read full article

Inditex has become the world’s largest fashion retailer. But how long can its dizzying expansion last? By Tobias Buck, Financial Times, June 18, 2014  A few weeks from now, young women all over the world will decide that what they really want to wear this summer is a long, flowing trenchcoat with a buckle belt and soft shoulders. They don’t know it yet. But Manuel Ruyman Santos knows, and Inditex knows, and €17bn in sales says they will be right once again.  For the moment, the trenchcoat is a prototype, hanging on a clothes rack at Inditex´s sprawling headquarters in Arteixo, northern Spain. But Mr Ruyman Santos, one of the designers of the new garment, is confident it will be a success. Soft trenchcoats have sold well in recent months, so he knows the new creation will tap into a broader trend. For Inditex, the biggest fashion retailer in the world, the success or failure of one trenchcoat is of marginal importance. It is just one of 18,000 individual designs made every year for its chain of Zara shops alone. Add in the group’s seven other brands – from upmarket Massimo Dutti to casual Pull & Bear – and the number rises to more than 30,000. The new coat is nothing but a tiny thread in a much bigger story – but one that illustrates how a small family-owned clothes manufacturer on the edge of Spain turned into one of the most striking corporate success stories of recent years. The rise of Inditex holds valuable lessons.... Read full article