Whilst manufacturing accounts for only 14% of the UK GNP and an represents a shrinking proportion of the employment sector, it accounts for over half of the country's exports, three quarters of all business research and development investment and still provides 3 million jobs.
Productivity has risen in the manufacturing sector by 50 percent in the past ten years, much faster than in any other sector.
With the recent contraction and turmoil in the financial sector, and a tough time ahead for retail, we ignore manufacturing at our peril.
Richard Lambert has written a revealing article over at FT.com ahead of the Governments launch of it's manufacturing strategy, I hope that the ministers involved take the time to read it.
The following extracts are from the article, which can be read in full here.
Three questions are worth asking as the government prepares to launch its manufacturing strategy. Does the sector actually matter in the UK any more? Does it have a future? And what role, if any, should government play?
The UK is still the sixth-biggest manufacturer in the world. Manufacturing accounts for half the country's exports, with high-technology products accounting for a significantly higher proportion of overseas sales than is the case for the US, France or Germany. Britain attracts more foreign direct investment into manufacturing than any other country in the world apart from the US.
The sector accounts for three-quarters of all business investment in research and development in the economy. And exposed as it is to the full blast of global competition, productivity has risen by 50 per cent over the past 10 years, a much faster rate than for the rest of the economy.
All this means that manufacturing remains a key factor driving technology and innovation in the UK and has a critical part to play in the necessary rebalancing of the whole economy. Growth has been powered for years by domestic consumption and government spending: as they slow down, the hope is that increases in net trade and business investment will take up the slack.
And it is not just about economics. With about 3m jobs spread across the country - a good number of them in the middle-income category - it is a force for social cohesion in a way that financial services, for example, are not.Technorati Tags: UK Manufacturing