Manufacturing growth needn't cost a fortune

With or without the pre-Christmas snow, it’s generally agreed that the latest economic reports would still be looking pretty bleak. Indeed, the fact that anyone’s even thinking at all seriously about the weather playing a role is a reminder of the economy’s fragile state. But while concerns deepen that we could be about to re-enter recession, the continued growth of UK manufacturing is a cause for cautious optimism.

And if ever there was a reminder that engineering and technology should be at the heart of the UK’s recovery then surely this is it.

In recent weeks it does appear that the government has stepped up its dialogue with industry. Earlier in January, the London launch of Sheffield’s forthcoming Global Manufacturing festival was awash with MPs, while just last week BIS invited the UK’s business leaders to a manufacturing summit to discuss how the government could help UK firms make the most of opportunities in manufacturing.

Despite this momentum, the government’s industry-friendly rhetoric is not all that different from its predecessor’s. What is different is the ever-present whiff of austerity. While not so long ago each new announcement was accompanied by the sound of Peter Mandelson scribbling in his cheque book, the government’s industry dealings are now rather more frugal. Sure, there are still investment announcements, but one of the chief recommendations emerging from last week’s summit was the suggestion that the UK’s manufacturers address outdated perceptions of engineering by throwing open their doors to youngsters. A laudable aim, but not something that’s going to have an impact overnight.

“The fact that anyone is even thinking at all seriously about the weather’s role is a reminder of the economy’s fragility”

Conveniently for the government, however, the message from industry appears to be that it needn’t cost a fortune to advance UK manufacturing; that creating the right conditions and removing the barriers to economic growth doesn’t have to be expensive.

It’s a point that crops up in a number of our recent reports. For instance, in our report Growth industries: the future for the UK’s emerging technology sectors, Martin Sweeting, a key figure in the UK’s buoyant space sector, says a supportive tax structure is more important than government handouts. Elsewhere, optoelectronics pioneer Prof David Payne says the best thing government can do is help create an environment in which innovation can thrive and then stand well back.

Whether government is creating the right conditions for growth is open to question. In his valedictory speech last week - while singling out manufacturing as a bright spot - outgoing CBI boss Richard Lambert slammed the coalition’s growth plan as vague and careless. Against such criticisms, George Osborne’s insistence that the snow is to blame for the recent contraction looks increasingly wide of the mark. Which, considering there’s supposed to be more snow on the way, should be a big relief to all of us.