HSBC report optimistic about future of British manufacturing
Bristol and Glasgow have emerged as the "super cities" that will lead the rebalancing of British manufacturing towards hi-tech production and renewable energy respectively, HSBC predicts.
A report entitled The Future of Business 2011 from HSBC Commercial Banking says that Made in Britain is making a comeback. It confidently predicts a renaissance of Britain's manufacturing heyday and a return to the world buying goods that have been manufactured in Britain, but with a 21st century slant.
There is a long way to go, though – a decade ago manufacturing made up just under a fifth of the economy but that figure has fallen to an eighth.
Bristol and Glasgow join the super-cities of the coming decade identified by HSBC two years ago: Newcastle, London, Leeds, Brighton and Liverpool. The report says there has been a resurgence in manufacturing, especially in the Midlands and the north-east, reshaping traditional skills and crafts and making the UK known for prototyping, plastronics and advanced composites.
"Out of recessions come new trends and this report crystallises how adaptable entrepreneurs and small businesses are shaping a new business landscape that British business is set to follow," said Jacques-Emmanuel Blanchet, head of HSBC Commercial Banking UK.
"Change is definitely on the cards. Sixty-two per cent of business leaders believe that Britain will increasingly stand for 'innovation and entrepreneurship' compared with 46% previously. It is evident that in a decade's time we will have seen a redrawing of the industrial map of the UK."
Business leaders see digital communications (68%), biotechnology (65%) and low-carbon industries (60%) as providing the best prospects for growth over the coming decade.
Lee Hopley, chief economist at the EEF manufacturing organisation, noted that some of the new technologies build on traditional industries – for example, composites has links with aerospace and low-carbon transport such as electric or hybrid cars will build on the strength of the conventional car industry.
She added: "Since the start of the recovery, manufacturing has had a pretty strong export performance. A lot of the groundwork from manufacturers started well before the recession – they looked at where the new growth opportunities were going to be ... We're looking at an economy where we rely less on the consumer and government spending."
The HSBC report highlights Bristol, with its tradition of hi-tech production within aerospace and information and communications technology, as a budding centre of advanced manufacturing. "New world leading research centres into materials science and pioneering research at Bristol University will only add to the city's repertoire," said Jim Whyte of The Future Laboratory, which compiled the report for HSBC.
Glasgow is forecast to becoming a leading international force in renewable energy, with Strathclyde University and the Sustainable Glasgow consortium leading the way. Other renewable energy centres will be in Orkney, Humber, North Wales and Cornwall while Durham, Cambridge, London and Swansea are key cities for plastronics and Oxfordshire for space industries. "This report's findings are bright for the future of the British economy and especially bright for British manufacturing," said business secretary Vince Cable. "We want to see technological advances generate new growth and new jobs across the country." He said the government was creating 10 Technology Innovation Centres to draw on leading edge research and investing £1.4bn from the regional growth fund in companies with ambitious expansion plans.
However, so far the banks have missed targets set by the government for lending to small and medium-sized businesses.