business focus
Chartered accountants Haines Watts presents a series of articles based on its blogs. It offers analysis, reviews and comments and welcomes your feedback at
hwca.com/blog
of the month
Opportunity for the small and medium-sized business?
writes Rodney Style, managing partner at Haines Watts
One of Donald Trump’s pre- and-post election themes has been bringing jobs back to America. To use the jargon of the economists, it’s a “protectionist” policy whereby goods that are to be consumed in the US are manufactured there. He has been publicly bashing the multi- nationals, notably those in the car industry.
It’s not just the US which is adopting this approach. Several countries, including China, are requiring that the supply chain for manufactured goods is kept local. The net result of these policies is to reduce cross- border trading and the power
of the multi-national. This must present an opportunity for small and medium-sized local businesses.
Britain has long been a strongly non-protectionist country, and we are unlikely to adopt such a policy, particularly after the Brexit vote. “Bring jobs back to Britain” is unlikely to happen if it’s dependent on a policy change. Besides, it has long been the case in the UK that, for example, car manufacturing has used many local “supply chain” small and medium-sized UK-based companies anyway.
Will jobs return to the US? Well,
some will. However, the world has moved on from previous eras, where protectionism could give a decent-sized, short-term boost to an economy. The big change is the advent of the robot, which has chopped employment numbers in manufacturing dramatically, and will continue to do so increasingly in the future.
It’s simple. Robots have replaced bodies and have made manufacturing much less labour – intensive and therefore more efficient.
Surely now is the time for Britain to compete against low labour
cost economies by introducing robots too, which puts us onto a level playing field with our competitors. This will not bring many jobs back to Britain, but it will keep tax revenues in the UK and help our dire balance of payments situation.
For further information:
hwca.com
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businessmag.co.uk
THE BUSINESS MAGAZINE – THAMES VALLEY – MARCH 2017
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