The United Kingdom is a strong manufacturing nation but is often compared to the strengths of competitor countries.
UKMR 2016 reviews the status of the manufacturing and engineering sectors in these peer group countries, focusing on the industries and technologies they are investing in:
The one-time low cost attraction of ‘Made in China’ can do nothing to decelerate what in 2015 was a sharp recession in some manufacturing sectors. Although the ‘One Belt, One Road’ programme has invested enormously in foreign infrastructure, China’s manufacturing overcapacity still matters. Low-tech firms are attracted to Southeast Asian countries that offer both cheaper labour and a cheaper environment – both in taxes and in terms of environmental cost.
China’s industry is changing shape, with service-oriented manufacturing progressing quickly. Internet financing has been like a spark igniting a prairie fire, creating ‘internet-alization’ of conventional manufacturing (aka Internet+). The recently released ‘China Manufacturing 2025’ may spur a new robotized industrial revolution, where intelligent manufacturing may upgrade ‘Made in China’ to ‘Created in China’.
The second largest economy in the Eurozone has been battling stagnation in recent years and unlike Germany – and the UK – still struggles to perform in the post-2012 recovery period. A few signs of improvement are beginning to emerge, with unemployment rates registering the highest drop in eight years, although French manufacturing still remains contracted and companies are holding back large investments.
Labour market reforms are now more urgent than ever. The government is hoping to shake things up with Economy Minister Emmanuel Macron’s package of liberalisations. Alongside government action, industrial businesses in France are finally embracing technological trends and shifting their focus towards digital innovation. France looks equipped to restore industry’s profitability and 2016 will determine whether desired economic outcomes are converted into reality.
The reputation for integrity and product quality of Europe’s biggest economy took a big knock with the Volkswagen diesel engine scandal, raising questions about the professionalism of the entire automotive industry. Beyond cars, Germany is investing in Industrie 4.0, aka ‘aka the fourth industrial revolution’, the digitisation of factories and integrated business data.
More a gradual evolution than revolution, digital factories are coming and Germany is, characteristically, leading the way. In a rapidly globalising world, as the British public weigh up the merits of Brexit, Germany remains an exemplar of internationalisation – but it is finding its efficiency is a barrier for new growth: Germany has many of the largest global markets covered.
While Prime Minister Narendra Modi’s ‘Make in India’ campaign appears to have captured the imagination of global companies looking at a slowed-down-but-still-fast-growing economy, and a huge captive market, what it does not hide is the failure of an Indian revolution in manufacturing so cleverly hijacked by the erstwhile communists of China. To say that India missed the bus is stating the obvious, but the automotive revolution that began when Japan’s Suzuki collaborated with the government-owned Maruti in the 1980s is now a global success story, and one that has brought top automotive manufacturers to the country.
Ironically, if Indian government policy once thwarted manufacturing in the country, it is now spearheading efforts to reverse the situation, seeking collaboration against the one time penchant of going it alone, and that lends credibility to the Make in India campaign, coupled with the stress on public spending on infrastructure without which no progress is possible. The emphasis on ‘Digital India’ also means the new initiative is in tune with current trends, and not mired in past glories – be they real or imaginary.
Japanese industry is coming back with confidence, and is determined to avoid the fate of 25 years ago. From 1991, Japan went through the ‘Lost Two Decades’, the period of long-term economic slowdown and zero interest rates after the burst of its bubble economy. However, these were not just ‘sinking’ decades, but periods of business structure changes, R&D reorientation, and above all changes in the mind set of management and engineers. These formed the solid foundation of the emerging ‘blossom economies’ in 2014-2015; 2014 marked the Year of Regenerative Medicine, and 2015 the Year of Hydrogen, as well as of the Year of Robots.
It is true that Japanese society and industry are facing several challenges, such as an aging society, the rising cost of imported energy under a weakening Yen, and being surrounded by rapidly-growing Asian competitor countries.
However, Japan’s real challenge lies in how her industry can identify new value which its products and services can deliver to society, how it can utilise expertise and technology to create the re-identified new value, and how it can reshape the business environment to get this new value adopted by global society. In this process, Japanese industry is seeking governmental support for the deregulation and rationalisation of regulation, and global standardisation.
- The US
The United States has some of the pre-eminent manufacturing technologies globally, is a leader in additive layer manufacturing, and is successfully exploiting new sources of energy such as shale gas. But scandals blamed on poor engineering have blighted the automotive sector in the US, while the drop-off in the oil price has damaged industry.
Oil and gas is at the centre of the biggest industry story of 2015, as states and industry groups queued up in October to file court challenges to block President Barack Obama’s controversial Clean Power Plan, which aims to reduce greenhouse gas emissions.
There is no shortage of innovation in Africa and car manufacturing is a growing industry – albeit one reliant on imported parts and cheap labour – but problems in terms of electricity supply and transportation of goods are hampering engineering. Observers say 2015 has been tough – and next year could be just as challenging
The authors of these chapters are mostly native journalists based in these countries/regions, or have strong links to that country.