A poor article based on a very selective and introspective graph.
1. The graph shows there's been a mere 25% increase in manufacturing output value since the 70s. The economic value growth of other sectors has been far greater than that.
2. It does not show the vastly greater growths in manufacturing from other developed countries, including the US!
3. How manufacturing behaves in a downturn is very closely related to how the business is managed (i.e. during the boom part of the cycle). If industries or many companies take on large amounts of debt and merely trim costs in the name of efficiencies during booms, instead of optimising for cash, new investments or your best assets, they will suffer in the inevitable downturns, etc. The former practices are common in Anglo-Saxon capitalism.
Thus, the implication that manufacturing necessarily is more volatile during a downturn than services is superficial. It may be for the UK up till now, but it does not have to be that way and, even if it were, it may not be enough of an issue. How do you think some of those productivity gains were previously made - low hanging fruit?
1. The graph shows there's been a mere 25% increase in manufacturing output value since the 70s. The economic value growth of other sectors has been far greater than that.
2. It does not show the vastly greater growths in manufacturing from other developed countries, including the US!
3. How manufacturing behaves in a downturn is very closely related to how the business is managed (i.e. during the boom part of the cycle). If industries or many companies take on large amounts of debt and merely trim costs in the name of efficiencies during booms, instead of optimising for cash, new investments or your best assets, they will suffer in the inevitable downturns, etc. The former practices are common in Anglo-Saxon capitalism.
Thus, the implication that manufacturing necessarily is more volatile during a downturn than services is superficial. It may be for the UK up till now, but it does not have to be that way and, even if it were, it may not be enough of an issue. How do you think some of those productivity gains were previously made - low hanging fruit?