Yes Minister – This is Your Cup of Tea!

UK used once to be a manufacturing and innovation exporting behemoth. That was long time ago.Looking into my address book, large junk of manufacturing SMEs is not from UK. I sure have traveled on business to UK.

And here is some EU statistics to support the skewed impression my address book is delivering.  

UK’s manufacturing value adding contribution was roughly 11% compared to Germany’s or Italy’s almost 30%.  Even Switzerland, with its very large financial industry, has a manufacturing segment value adding contribution of almost 30%.  ( EU Stats).

This perspective is supported further for instance by looking into technical distribution business. Based on my past experience, in UK companies are selling much more to MRO segment than their continental competitors, which are mostly selling to OEMs.

On the other hand UK has, just to mention a few segments, a fairly large Pharmaceutical, Aerospace and Defense, Machinery & Equipment industries in terms of employment and gross value add contribution. However, by far the largest manufacturing segment is Food & Beverages & Tobacco.

It seems that UK has not been able, for some reason, to have “spin offs” from larger technology corporations in the form of MBIs or MBOs, leading to a strong SME manufacturing segment. This is a bit surprising though, because UK does have an extremely strong finance sector, so options for getting financing should be at hand.

Or is it the classic; the finance industry professional does not consider the industrial business attractive or safe enough.

At least in the past the UK legislation did offer favorable conditions to financial sector, which has contributed further to this sector growth over the years.

Whether UK will stay or not in EU, is not a relevant issue for this challenge to be tackled. The key is to seek ways how to encourage young people and experienced managers to become manufacturing entrepreneurs and make it equally or more attractive than financial services sector jobs. Tough call – I don’t think so. Because financial services sector has lately very successfully managed to make their sector a very ugly looking one, to say the least.

Some regions in UK do promote their own region to foreign manufacturing SMEs as a new company location!

This is an opportunity for North American manufacturing SMEs to enter the European market altogether. I reckon the “Old Chap” across the Atlantic is certainly ready for a good chat, with nice cup of tea of course. Cheers!

TAGS: The Economy
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