Industrialisation in Britain

Introduction

According to Stephen Timms, the minister for Digital Britain, the manufacturing industry accounts for about sixteen percent of the wealth of Britain. The same industry account for about sixty percent of the exports sourced from Britain and employs approximately three million Britons. As such, the role that the manufacturing industry plays in the economy of this country cannot be ignored.



However, there is one thing that seems to be escaping the attention of this man. The manufacturing industry could be playing that vital role in the economy today, but it has changed a lot over the years. Experts are of the view that manufacturing in this country has shrunk significantly over the past century. A great number of the big players and great employers in the early 1900's have disappeared from the scene. These are industries such as steel, coal mining and ship building. These industries have been overtaken by the service industry as the biggest employer in Britain today. A recent survey by the Office of National Statistics revealed that many people today are involved in the production of sandwiches than the number involved in the manufacture of steel. Food industry has emerged as the biggest employer in Britain in the twenty first century.



The severity of this situation can be gleaned by the accounts of Russell Luckock, owner of a small engineering company in the Midlands. As quoted by Clark (2007), this man bemoans the dwindling of the manufacture industry from a behemoth in the 1900's to a sickly beast in the twenty first century. He is of the view that in the past fifteen years, the numbers of people who are employed in manufacturing have declined in an alarming rate. When he started his company in the early fifties, more than sixty percent of Britons were employed in this sector. Today, less than fifteen percent of people in Britain make their living from this sector (Clark 2007).



Britain's Industrialisation: Current Status

As earlier indicated, this development has raised concerns as to the state of Britain's industrialisation today. There are people who argue that the fact that the service industry has overtaken manufacturing is an indication of Britain's deindustrialisation. In a nutshell, Britain is regressing as far as industrialisation is concerned. The opposing school of thought-that subscribed to by the most optimistic of Britons- opines that the decline of the manufacturing industry is not an indication of the deindustrialisation. Rather, this is a common path that is followed by all normal industrialisation processes. As such, Britain is still industrialising, albeit in a different direction.



This argument has led to a divide within the economic analyst ranks. There are those people who are of the view that the country is so de-industrialised to the extent that the service industry is far ahead of manufacturing. They cite a report released by the National Office of Statistics indicating that today, more people are employed in sandwich manufacturing companies than in steel manufacturing industry. The food industry, a service industry, has become one of the major employers in the twenty first century, far outdistancing manufacturing.



There are those who believe that the country is developing its businesses-as far as industry is concerned-according to the dictates of modern market evolution. The modern market evolution dictates that service industry for a developing economy should always surpass the manufacturing industry. This is because most of the activities involved in production nowadays incorporate some component of information technology. This, together with mechanisation, has significantly reduced the number of people involved in manufacturing.



According to Howard (2008), Britain is the world's sixth largest economy by nominal Gross Domestic Product. As far as purchasing power parity is concerned, the country ranks seventh in the world. When it comes to market exchange rates, the country can be considered to be the world's sixth largest economy. In this respect, the country ranks third in Europe after Germany and France (Furtony 2009).



Britain was the cradle land for industrial revolution. It started here with the establishment of heavy manufacturing industry like ship building and steel manufacture. The industries were shipbuilding, coal mining, steel manufacture and textile industry. This country ended up dominating the world's economic arena in the 19th century. This was driven by the thriving manufacturing industry.



Other nations tailored their industrialisation to the United Kingdom. But something negative was happening to industrialisation in Britain, the birth land. The first and second world wars, in which Britain was a central player, greatly affected the economy (Capellio 2007). The country lost her competitive edge. The twentieth century saw a progressive decline in the manufacturing industry, especially heavy manufacturing (Capellio 2007). Despite the fact that it remains one of the country's main economic activity, manufacture has now declined to account for a mere fifteen percent of the national gross output by the year 2003 (Howard 2008).



Manufacturing Industry Still Strong in Britain

Rt. Honourable Stephen Timms, the minister for Digital Britain-quoted earlier in the paper- is enthusiastic about the prospects of the manufacturing industry in this country. The manufacturing industry falls under the docket of Digital Britain Ministry. Quoted by the Department for Business Innovation (DBI) (2008), Timms is of the view that this is a very central facet of our economy. It accounts for about one sixth of the country's wealth and two thirds of Britain's export (DBI 2008). About three million people are employed in this sector, a significant number by any standards.



Timms further asserts that "Britain is the sixth largest manufacturing economy in the world" (DBI 2008). An indicator to this is the fact that the country is today manufacturing twice as many cars as it did a quarter of a century ago. The truth of this matter is underscored by the fact that about seven of the world's top motor manufacturers are based in Britain (Gregory 2005). This includes Chevloret, Ford and BMW among others. Timms is of the view that 19 out of the top twenty auto parts makers carry out their activities within the British boundaries (Elliot 2006).



The role that the motor industry, a manufacturing one, plays in the world economy cannot be ignored. It is noted that more than seventy five percent of the cars that are manufactured in this country are exported to various parts of the world (Howard 2008).



Evolution of the Service Industry in Britain

With the decline of the manufacturing industry, there has been a gradual-and sometimes exponential-rise in the service industry. According to Milwaukee (2009), the British economy now resembles that of the other industrialised nations. It is now an "eighty/twenty" economy (Milwaukee 2009). This means that eighty percent of the economy is made up of services while the other twenty percent is made up of manufacturing (Dewey 2006). This fact remains whether one considers the GDP of the country or the proportion of the labour force that is employed in these two sectors; they all indicate an "eighty/twenty" phenomenon (Furtony 2009).



A fact that is worth noting in this respect is that of the service productions in this country, some of these services are what Gregory (2005) refers to as non-tradeables. What this means is that though these services are produced, and though they account for a certain percentage of our GDP, they cannot be traded on the international market. As such, they are not open to international competition. Alternatively, even if they are open to this competition, it is not as aggressive. These are for example hairdressing, education, hotel and catering and such others (Dewey 2006). But others are tradeable. They are open to international competition since they can be delivered to the international market for trading. They include film production, music, literature and financial services. Others are travel services like air travel.



Proportions of exports made by Britain to other parts of the world economy are largely composed of services, as opposed to goods. They include financial services, considering the fact that London is a banking hub in the world (Turner 2008).



The construction industry, as of 2004, added a gross value of £64,747 million (Furtony 2009). Another major player in this industry is the wholesale and retail trade. This sector is made up of motor vehicle trade, motor vehicle repairs and personal together with household goods exchange (BBC News 2009). In 2004, these services accounted for £127,520 million in the country's economy (BBC News 2009). In the same year, hotels and restaurants, through their services, accounted for £33,074 million, communication £29,762 million while the contribution of the transport and storage was £49,516 million (Furtony 2009).



London is the global leader in financial services provision. This is composed of the London Stock Exchange, London Metal Exchange and Lloyds of London, an insurance firm which is famed for its coverage of ships and other seafaring vessels (Milwaukee 2009). There is also a conglomeration of banks in this country, including the Barclays Bank, Citigroup and others.



Production Industry and Employment in Britain

According to BBC News (2007), large employers in the economy in 1907 included ship builders and steel manufacturers among others. All of these were manufacturing industries. In the year 1907, almost a century ago, the Office of National Statistics conducted its maiden census in this sector and interesting facts were revealed (BBC 2007).



This census revealed that in 1907, 1.4 million wage earners in Britain earned their living from the colossal steel making and shipbuilding industries (BBC 2007). On its part, the deep coal mining industry employed around 837,000 labourers. This is significant given that at this time, this sector (coal mining) accounted for a measly 25% of the total British industrial production. However, the people employed in this sector reached 1.2 million in the year 1924, according to another census conducted in this year (Capellio 2008). This picture changed again in the year 2002, a time when the coal mining sector had been almost eliminated from the face of our industries. Only 8,000 people were employed at this time in this industry (Capellio 2008).



The number of people that were employed in the motorcycle and bicycle manufacturing industries in the 1940,s and 1950's was also significant. This is due to the fact that the demand for these products was also high at this time. In 1954, 44,500 people were employed in this industry (BBC 2007). This has significantly changed today. Only a fraction of these are needed to keep this industry, or what is left of it, running. The following figure will put this picture into focus.



Today, a total of three million people make their living from the manufacturing industry. This is as compared to almost seven million, as earlier indicated, about a hundred years ago. This is an indication of the decline that is been experienced by this industry. Regardless of this, productivity has peaked by 90% over the past fifty years. From 1980, manufacturing has risen from 84 to 97% (Furtony 2009). This is a rise of 15% in the course of a quarter of a century (Howard 2008).



Some industries that are dominant today were non-existent a hundred years ago. A case in point is the aerospace industry. This industry was non-existent when the Office for National Statistics conducted the census that has been alluded to above. By the year 1924, when the census was conducted for that year, the aerospace industry was included. It employed 12,700 people at the time (Clark 2007). This is significant considering the fact that the industry was relatively new at the time. In the year 2004, the industry employed about 101,000 people (BBC 2007).



It is estimated that Britain's aerospace industry employs about 26% of all the aerospace employees in Europe (Furtony 2009). This is given the fact that this industry is one of the strongest and largest in the continent. This is despite the fact that the industry has to deal with competition from France, which employs about a quarter of all the staff in this industry in the continent (Milwaukee 2009).



Another indication of the direction that industrialisation is taking in Britain is indicated by the development of salary and wages in the economy. In recent years, the wages have been rising (Gregory 2005). This has led to the struggling of labour intensive industries, like the manufacture, as they try to compete with low economies in Asia and Eastern Europe. This rise has been attributed to, among others, unionisation of the workers (Dewey 2006). The workers have been able to fight for their rights and as such, they have been able to effectively campaign for the rise in their salaries (Capellio 2007).







Manufacturing and Mechanisation in Britain

Mechanisation is one of the epitomes of industrialisation. This is because as new technologies continue to evolve, people come to realise that a piece of work that takes ten people to perform can be performed by a single machine within the same time frame (Dewey 2006). As such, it is realised that mechanisation makes production cheaper, as it cuts down on the costs of production (Milwaukee 2009).



Mechanisation of the manufacturing industry in Britain can be traced to the textile industry. This is with the invention of the Awkright frame for spinning. The effect of this is that fewer and fewer people are now needed in the manufacturing industry.



Manufacturing and Industrialisation in Britain over the past Century

A look in the British industry will reveal that in the course of the past 100 years, declining industries such as steel, deep coal mining, ship building and textiles have been replaced by other industries (Gregory 2005). The emerging industries are composed of pharmaceuticals, electronics and aerospace among others. The new entrants in the industry are both successful and less labour intensive. What this means is that, for example in electronics, fewer people are needed to produce goods of the same value as in textile. Given the fact that these industries have been on the rise, it is no wonder then that fewer and fewer people are employed in the manufacturing industry. This is because the new manufacturing industry needs less people than it was the case before.





Conclusion

Many people are now employed in the service industry than in the manufacturing industry. This has led many people to believe, erroneously, that this is an indication of deindustrialisation in Britain. However, this is not the case. Industrialisation dictates that a certain stage will come when the service industry is going to surpass manufacturing. This is because of integration of technology, for example machines and information technology, into the manufacturing process. Less people are now required in the manufacturing industry due to mechanisation, and they are attracted to the service industry.





Bibliography

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Clark, Emma N, 2007. Is British Manufacturing Dead? Retrieved from http://news.bbc.co.uk/2/hi/business/1871493.stm; on 9th October, 2009.



Department for Business Innovation and Skills 2008, Westminster Forum: The Future for Britain Manufacturing, retrieved from http://www.berr.gov.uk/aboutus/ministerialteam/Speeches/page42162.html; on 9th November, 2009.



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Elliot, Larry G, 2006. The Strong Pound is to Blame for the Demise of the British Industry. Retrieved from http://www.guardian.co.uk/business/2006/oct/09/politics.economicpolicy; on 9th November, 2009.



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