Alf Young: Manufacturing a robust economy THE UK has lost its manufacturing base and unless this can be recreated then the future looks bleak, writes Alf Young In his budget last March, Chancellor George Osborne called for a manufacturing renaissance in Britain. What we need, he suggested, was "a march of the makers." For three decades and more governments of all complexions had presided over a withering away of our collective capacity to make things. Like other developed western economies, but more enthusiastically than most, we have progressively off-shored our ability to make many of the things that shape the lives we now live. From the clothes on our backs to the bikes and tools in our garden sheds, from the furniture, appliances and toys at home to the mobile phones and tablet computers in our pockets and bags, making things increasingly became something others do for us, notably in China and across much of the rest of Asia. The East has grown steadily richer making things for us. Here in the post-industrial reaches of the West, more and more of us have migrated into service sector occupations, supplementing our already upholstered complacency by borrowing more and more money, in the good times, to consume this swelling tide of more-cheaply-produced imported goods. There are legitimate concerns about the conditions under which some of these goods are produced. But that is trumped, every time, by the lure of so much new stuff in such proliferating variety. The surplus maker-nations of the East and South underwrote our profligacy. Then, four years ago, the roof fell in. The coalition, of which George Osborne is a leading part, came to power promising to fix our yawning fiscal deficit and preserve our international reputation for credit-worthiness. But it promised more than that. It promised to rebalance our economy, away from galloping consumption towards making more things again and selling them to others. Hence that rather quaint image the Chancellor conjured up of tradesmen and women reinvigorated, climbing down from trade union banners and the stone friezes of Victorian public buildings, marching once more to their lathes and looms to rescue us all from economic oblivion. If the Osborne family could still make money from wallpaper, paint and furnishing fabrics, why couldn't more of us rediscover the virtues of the manufacturing habit? A year on, turning that stirring rhetoric into clear signs of progress is proving deeply challenging. Despite the coalition's commitment to austerity, two of the three major rating agencies now have the UK's AAA status on "downgrade" watch. In his recent leaked letter to cabinet colleagues, Vince Cable says "a compelling vision of where the country is heading beyond sorting out the fiscal mess is still missing." The business secretary wants the government to come up with "a clear and confident message about how we will earn our living in future." He is not alone in thinking a vital ingredient in such a message has to be an unequivocal commitment to a manufacturing revival. At this week's SCDI Annual Forum in St Andrews, the keynote speaker, Professor Stephane Garelli, called for more global competition in manufacturing. One of the slides the professor used was a cluster of logos of major Chinese companies, most of them still largely state-owned, many barely recognisable here, which make more and more of the goods we buy. Haier, for instance, is already the largest manufacturer of consumer white goods on the planet. However the dynamic in that trade in goods from the East is already changing. Container ships bringing manufactured goods here and to the US already all arrive in dock full, but up to half of them leave empty. But last year 56 per cent of Chinese exports went not to the West but to emerging southern economies where growth, both in terms of population and demand, is strongest. Western economies are finding growth of their own hard to come by. Overall Europe is losing population. We now worry whether our children will find any rewarding work. We suspect theirs could be the first generation in the modern age to turn out poorer than their parents. "We need to respond," argues Professor Garelli. We need to re-industrialise. He stresses he is not advocating wholesale protectionism. But he believes we need more competition around the world in manufacturing. "A country is what it makes," he argues. Unsurprisingly he is Swiss. But where to turn, across the UK or in Scotland, to find more things we could profitably make and export? Over the decades of decline, public policy focussed on replacing lost indigenous manufacturing skills with inward investment from elsewhere. Such investment has revitalised parts of of the car industry south of the border. But Scotland's bid to carve out a presence in the silicon industries of the digital age produced less encouraging results. In terms of mass manufacture, Silicon Glen has largely come and gone. Thriving pockets of R&D and customer support remain but the broad mass of computer, mobile phone and chip makers disappeared almost as quickly as they arrived. A recent graphic on the Telegraph website of Britain's 1,000 Brightest Businesses produced just 38 in Scotland. Even in areas where we still have some strategic advantage, like offshore oil and gas, we struggle to match our skills pool to the opportunities available. Another forum speaker, the principal of The Robert Gordon University, Professor Ferdinand von Prondzynski, pointed out that, while Scottish universities currently turn out four times as many law graduates as are likely to get jobs in the profession, only 4 per cent of graduates from the two Aberdeen-based universities are engineers, at a time when there is a growing shortage of such skills in the North Sea, both in Scottish and in Norway. In many ways, our manufacturing dilemma was set in its sharpest relief by what two of the youngest contributors to this year's SCDI Forum had to say. One was the 26-year-old leader of Aberdeen City Council. The other a trainee planner and recent apprentice at Glasgow City Building. Councillor Callum McCaig, a politics graduate, said he knew of no-one among his contemporaries who had set up their own business. He put that down to "an overwhelming fear of failure." Nor had anyone tried to sell him the idea of becoming an engineer. Ronson Slater's father already runs a small construction business. Ronson described himself as his Dad's "favourite labourer." With few school qualifications, he explained, that an apprenticeship with City Building turned his life around. Now he's sitting in an office, dealing with chunky contracts, learning about planning law. "Before, the most I was capable of was getting my hands dirty and building things," he said. Clearly if we are to achieve that manufacturing renaissance, we need to confront that cultural fear of failure and acknowledge that making things as something much more nourishing than just getting your hands dirty.