34 AEROSPACEMANUFACTURING | NOVEMBER 2009
FINAL APPROACH I
Facing the facts
The huge injection of public money
preventing the collapse of the
financial services industry sees the UK
experiencing unprecedented times. As
University of Warwick’s Dr John Garside
explains, the country now faces an even
greater challenge in maintaining its
standard of living and global influence.
Dr John Garside: Principal fellow, The University of Warwick
A
country’s wealth defines its standing in the world and could prosper as a post industrial nation. We must reassess
throughout history nations have become rich by mining, the true value of manufacturing industries and realise overseas
growing or making things. The reality is the UK relies companies who purchase UK assets do it for their own
on large overseas borrowings to maintain our standard of living. benefit and take decisions that best meet the interests of their
In March 2009, research organisation, the ERA Foundation businesses and stakeholders. Without a strong UK owned
published a report entitled ‘The Sustainability of the UK manufacturing base, many value added professional jobs will
Economy in an Era of Declining Productive Capability’, move away. To rely on such companies to sustain the long term
which included data up to 2007 on the state of the UK development of high level commercial and technical skills in
trade balances. This revealed that the balance of trade has the UK poses significant risks.
G H F O L Q H G 0 S H U \ H D U V L Q F H V W D Q G L Q J D W D Q H J D W L Y H 8
E L O O L R Q L Q 0 R I W K H 8 . ¶ V * ' 3 7 K L V G H I L F L W K D V E H H Q
accommodated by a surplus in the Financial Account, which
represents the sale of UK assets and corporate debt. Without
“Without a strong UK owned
these funds the UK could not have afforded to finance its
current trade deficits.
manufacturing base, many
No single initiative can resolve the dire economic situation
facing the UK. It must embrace a balanced economy and one
value added professional jobs
that can sustain profitable trade with the rest of the world. It
cannot keep using the sale of its assets and debts to balance its
will move away.”
accounts. Manufacturing must play a vital role in a balanced
8 . H F R Q R P \ , W F X U U H Q W O \ D F F R X Q W V I R U 0 R I H [ S R U W V D Q G L V
still a leading contributor to the balance of trade. It’s difficult The UK has a wealth of industrial talent and has led the
to comprehend why governments, key decision makers and world in the design of aircraft, nuclear power generating
financial institutions do not cherish the wealth and social systems, high performance cars, pharmaceuticals, and much
benefits provided by our manufacturing industries, and appear more. The rest of the world is desperately trying to develop
content for them to transfer into foreign ownership. We have many of these products but we seem to lack the political
now reached the stage where, apart from the large aerospace determination to muster our resources and make the necessary
and defence businesses of BAE Systems, Rolls Royce and F R P P L W P H Q W V 2 X U H [ W H Q V L Y H D H U R V S D F H N Q R Z O H G J H L V E H L Q J
* . 1 L W L V G L I I L F X O W W R Q D P H D 8 . S X E O L F O \ T X R W H G 2 ( 0 V T X D Q G H U H G 7 K H F K D O O H Q J H R I F O L P D W H F K D Q J H L V D J U H D W
Such companies head the supply chains, providing the orders R S S R U W X Q L W \ W R X V H R X U H [ S H U W L V H
for many tier suppliers who in turn produce components and However, if we do not have manufacturing industries capable
S U R Y L G H W K H V X S S R U W V H U Y L F H V Q H H G H G W R G H O L Y H U K L J K T X D O L W \ of developing these new technologies, designing products and
products. The UK aerospace industry remains one of the few manufacturing them in an environmentally responsible way,
industries to provide this stimulus and wealth. we become reliant on foreign companies to solve the problems
2 Y H U W K H S D V W W K U H H G H F D G H V S R O L W L F L D Q V H F R Q R P L V W V D Q G that threaten our future. Y
the financial services industry have believed that the UK
www.warwick.ac.uk
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