I agree with one of the earlier comments that a stable platform would be a massive help for manufacturers in the UK and the wider EU. But, as we all probably know, “we live in interesting times.”

It’s unlikely that UK or EU manufacturers will get the sort of stability and predictability desired. Several geo-political and socio-economic factors make this nigh on impossible; not least, residual uncertainty from the recent economic downturn; global terrorism and political instability in many important regions, especially oil-producing countries; volatility in raw materials commodity prices; and slowing of economic growth in China and other emerging market economies.

These are crucial factors that have an impact not just on the sales and purchasing efforts of manufacturers, but also on the monetary and fiscal policies of national governments, the European Commission and the ECB.

The UK manufacturing sector has suffered a noticeable decline since the shift to a services-biased economy back in the Thatcher era. Despite some recent positive indicators, it is unlikely UK manufacturers will ever enjoy the kudos and government support manufacturers in Germany and France enjoy. Case in point: compare the ease with which many UK manufacturing brands (from car makers to chocolate producers) have been acquired by foreign companies in recent years; try buying a top manufacturing company in France and see the reaction from the government there!

In general, manufacturers across the EU face similar challenges to those elsewhere in the developed world. The internet, the jet engine and falling telecommunications costs have combined to shrink the world and create a global village. This means it’s increasingly difficult to stay immune from factors outside the region, not least competition from low-cost labour economies.

UK and EU manufacturers may need to continue to seek and exploit opportunities to innovate; to invest in long-term capability; and remain agile to the vagaries of the modern business landscape. They certainly need to harness their core capabilities (which might be non-production activities like product design, raw materials sourcing or even effective marketing), and enhance their competitive advantage in an increasingly globalised marketplace.

Some help from national governments and the EU might help, but this would have to be non-protectionist measures.

© Sigi Osagie 2014

Categories: Other

Comment made on Interim Partners blog, Dialogue, 14-Dec-2014, in response to the post “The Future of European Manufacturing” by Claire Lauder, 4-Dec-2014