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UK electronics businesses thrive as slimmed-down specialists

By Peter Marsh Over the past 30 years the whole of UK manufacturing has become increasingly a collection of small to mid-sized companies making specialist goods in low volumes. Yet few sectors illustrate this trend more vividly than the business of producing electronics and electrical goods. As recently as a few decades ago the sector was populated by companies that were large and well known, if somewhat unwieldy in structure and erratic in the way they were managed. In place of the likes of GEC, Plessey and ICL that made products including white goods and telephones familiar to just about everyone, these companies' equivalents today are businesses excelling in niche areas of electronics in fields that in many cases are barely recognisable. The companies that are the leaders today are generally a lot smaller than the giants of the past. And as  Britain along with most other high cost nations has retreated from most consumer facing sectors of electronics, the fields where the UK remains strong are mainly involved with making products bought by businesses. Illustrative of such goods are esoteric items of hardware used for testing products in factories or on the laboratory bench, and complex components that are never seen by the ordinary man or woman and end up embedded inside items such as machine tools or aircraft. An example of Renishaw, the world's biggest maker of touch sensitive probes used in metal cutting machinery, whose chief executive and founder Sir David McMurtry is in the photo below. In addition to products made by Renishaw and similar companies  – a description of which would bring a blank stare to the face of the average person – are a few specialist consumer items  where the UK can claim

By |November 27th, 2017|Categories: Observations, Opinion|0 Comments

Japan’s robotic global champion

By Peter Marsh In a hall in a big aerospace plant near São Paulo, four yellow robots perform a series of snake-like manoeuvres as they clean and paint the exterior of giant fuselages being made by the Brazilian aerospace producer Embraer. The robots are among roughly 400,000 of the machines installed worldwide by Fanuc. The Japanese company is the world's biggest robot producers. Over several decades it has built up a near godlike status among admirers. The picture here shows a Fanuc robot during a demonstration at an industrial fair in Germany. Holmes Osborne, a US financial commentator who publishes GuruFocus, a newsletter, says:   "Fanuc is the best robotics company in the world, bar none.  If what everyone is saying is true, that the world is to be run by robots, Fanuc will have a ring side seat and is the stock to own." Another view comes from a senior executive at a big Japanese machine tool company: "They [ Fanuc] have a strong record on innovation. They stay close to customers and always seem to be pushing in a new direction." Fanuc last year had sales of Y536bn (about $5bn) with more than 75 per cent of revenues coming from outside Japan. Its shares have risen appreciably over the past year and the company's market capitalisation stands at just under $40bn, 10 times higher than US Steel and roughly four times bigger than Marks and Spencer. Behind Fanuc's stock market record is partly the perception that robotics will become increasingly important as technologies such as artificial intelligence (AI) and smart sensors amplify the powers of robots and other pieces of automation hardware. Armed with new capabilities robots could for instance start to appear in large numbers in the home, for

By |November 17th, 2017|Categories: Observations, Opinion|0 Comments

How China can build brands

By Peter Marsh Goodbaby is a Chinese manufacturer of children’s  “utility” products - push chairs, infant car seats and the like - with a growing reputation. With 11,000 employees and seven research centres in Asia, the US and Europe, the company dreams of establishing a name that resonates as strongly as Coca-Cola or BMW. Much the same is true of Chinese equipment giant Sany - which thinks it's on the way to cementing its global brand through the purchase of Germany's Putzmeister concrete machine maker. One of Putzmeister's truck-mounted machines is pictured above. But for all China’s progress in creating some big and powerful companies, observers are divided as to whether Chinese groups such as Goodbaby can create global brands that compete with the dominant corporate giants. By forming an impression in people’s minds, brands make it easier for companies to sell their products and services, whether to individuals, businesses or governments.  The stronger the recognition – and the more countries where the impact is significant – the greater will be the impact on revenues. For the past 70 years, US companies have led the way in brand building, followed by businesses based in other English-speaking nations and Europe. For all Japan’s economic surge since the 1950s, many of its top companies (excluding a few outliers such as Toyota) have yet to really make their mark in establishing global monikers. In recent years, China has made its presence felt, thanks mainly to the rise of a handful of internet, telecoms and retail leaders. The question now is whether China is likely to continue in this direction. Of the companies behind the world’s top 100 brands, according to rankings by the WPP advertising group, 54 are from

By |November 17th, 2017|Categories: Observations, Opinion|0 Comments

What listed giants can learn from private businesses

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 (pictured above and below, with one of his youthful employees) is chief executive and owner of Harwin. The company based near Portsmouth in southern England. It's 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

By |October 6th, 2017|Categories: Observations, Opinion|0 Comments

Schools promotion of engineering ineffective and wasteful

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

By |October 6th, 2017|Categories: Observations, Opinion|0 Comments

Britain climbs the world manufacturing league table

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

By |February 3rd, 2017|Categories: Observations, Opinion|0 Comments

A gaze into the future for the world steel industry

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 |November 3rd, 2016|Categories: Observations, Opinion|0 Comments

Made Here Now will showcase British manufacturing

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 |April 21st, 2015|Categories: Observations, Opinion|0 Comments

The new industrial revolution – all is explained

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 |November 11th, 2014|Categories: Observations, Opinion|0 Comments

New manufacturing policies for the developing world

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

By |November 3rd, 2014|Categories: Observations, Opinion|0 Comments