Searching for global competitiveness

Abstract

Manufacturing activity as a share of the economy has been declining across the developed world for at least the past decade. The threat of deindustrialisation in the UK should not, however, be overstated. For some to say that there will be no manufacturing in the UK a quarter of a century from now confuses an absolute decline in manufacturing with a process of structural change. While it makes sense for some goods to be manufactured in lower-cost locations, this is by no means true for all industrial sectors. Although a combination of the success achieved by companies and the anticipated intensification of global competitive pressures is likely to lead to more offshoring, the need for some products to be manufactured near to the markets into which they are sold, or where higher technical knowledge or skills are required, remains. This paper discusses how the UK manufacturing sector adapts to globalisation.