Tag: Manufacturing

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Business Development & Marketing Cash Flow & Forecasting General

Retrain to do what? The jobs of the future

the jobs of the futureA national government retraining scheme was proposed in July last year to help those workers whose jobs will become obsolete because of Artificial Intelligence (AI) and automation.
Whether it will materialise following the Brexit mayhem and subsequent election remains to be seen.
Research by Oxford Economics has found that 1.7 million manufacturing jobs have been lost to robots worldwide since 2000, including 400,000 in Europe, 260,000 in the US, and 550,000 in China and that a further 20 million manufacturing jobs will be obsolete by 2030 although most of these will be abroad.
There is no doubt that the future world of work, especially, but not only, in the manufacturing sector will look very different.
The drive towards aver more automation may conflict with concerns for the future of the planet and the environment but both will doubtless mean a radical rethink of economies, especially those that are dependent on consumer activity.
Demographics too will play their part as many of the populations of the developed world age and live longer and birth rates decline.
All this has led to an apocalyptic vision of the future by some, such as Aaron Benanav, a researcher in the social sciences at the University of Chicago, who argues that economies have, since the 1970s, been based largely on industrial production, expansion and exporting as their major economic growth engine and that such opportunities for growth are dwindling as more economies mature.
He argues that no other sector than manufacturing has been identified that can replace this out of date growth engine and that “restoring previously prevailing rates of economic growth will prove difficult if not impossible. Unless we find some way to share the work that remains, beggar-thy-neighbour politics really will tear our societies apart”.
Others, however, are more optimistic arguing that we have not even begun to imagine the jobs of the future.
Business Insider is one publication that has had a stab at imagining the jobs that will be needed in the future. Their list includes GPs, Dentists, Plumbers pipefitters & steamfitters, vocational nurses, construction managers, physician assistants, sales reps, secondary school teachers, tractor-trailer truck drivers, computer systems analysts, construction trades supervisors, service sales reps, software developers, and physical therapists to name just a few.
But these are all existing jobs in the world as it currently is. A global digital company, Cognizant, has gone even further and imagined jobs of the future that may be needed. A small sample from their suggestions includes:
Ethical Sourcing Officers for when corporations want to root their decisions on what is ethical and not what is profitable. The ESO will be in charge of production to ensure that every step of the process is in accordance with the ethical values of the shareholders.
Personal Data Brokers, who will make sure their customers are paid by those companies who use their data. This assumes that consumers will have full control over their personal data
Virtual Store Sherpas, will be the online equivalent of the in-store personal shopper, who will guide consumers through the process of selecting the most appropriate and affordable items and organise delivery.
Man-Machine Teaming Managers, whose job will be to “figure out and combine the strengths of man (cognition, judgment, empathy, versatility, etc.) and machine (accuracy, endurance, computation, speed, etc.) to create the most productive worker team possible”.
A brave new world or an apocalypse? Who knows? But there is no doubt that the future is out there!
 

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Business Development & Marketing Cash Flow & Forecasting Finance General Turnaround

The state of manufacturing in the UK and globally – October Key Indicator

the state of manufacturing - redundant machinesThis month’s Key Indicator looks at the state of manufacturing in the UK and globally and by all indications, it is struggling everywhere.
While the proportion of manufacturing as a part of individual national economies varies all economies depend on trade with each other and in an interconnected world a slowdown in one place can have a significant impact on others.
China is currently the No 1 in the world in terms of manufacturing output valued at $2,010 billion representing 27% of national output. USA is second ($1,867, 12%); Japan third  ($1,063, 19%); followed by Germany ($700, 23%); South Korea ($372, 29%); India ($298, 16%); France ($274, 11%) and Italy ($264, 16%).  The UK trails these countries in ninth place with $244 billion manufacturing output representing 10% of national output.
Poland meanwhile has the highest percentage of its workforce employed in manufacturing, followed by Germany, Italy, Turkey, and South Korea.
In the UK, manufacturing makes up 11% of GVA, 44% of total UK exports and directly employs 2.6 million people. In fact, in August according to IHS Markit/CIPS the UK manufacturing sector fell to a seven-year low.
The CBI (Confederation of British Industry) monthly survey showed that manufacturing order books fell in September to -28 from -13, well below consensus expectations of -16%. While food, drink and tobacco and mechanical engineering drove positive growth, metal manufacture, metal products and textiles and clothing pulled in the opposite direction.
However, figures everywhere over the last few months make grim reading.
IHS Markit’s latest snapshot for September of Germany’s manufacturing growth, where a score under 50 signals contraction, slid to 41.4, the worst reading since June 2009. In fact, the entire Eurozone is experiencing a contraction, according to official data from Eurostat, the statistical office of the European Union in Luxembourg.
In China, Reuters reports that growth in industrial production in August was at its weakest in more than 17 years while in the USA, too, the New York Times reported that in August the manufacturing sector contracted again as it had in July, albeit manufacturing accounts for just 11-12 percent of the country’s gross domestic product.

What is causing the current state of manufacturing in the UK and globally?

In a word, uncertainty is the theme everywhere, but while the primary causes may differ around the world, in many ways the underlying reasons are politics and market economics.
There are two ongoing conflicts: 1. between those who advocate stimulating economies and those who believe we should live within our means; and 2. between those who believe in market forces and those who seek to control them whether by tariffs, duty, currency control or exchange rates.
In September the USA introduced yet another set of trade tariffs on Chinese imports as part of the ongoing trade war launched by US president Donald Trump. The question is what next as tariff talks between the two are due to resume in October.
In the UK, clearly, the ongoing uncertainty is primarily over when, if or whether the country will finally resolve its various dilemmas over leaving the EU at the end of October as Prime Minister Boris Johnson continues to promise.
Manufacturers anticipate that output volumes will fall briskly over the next quarter and that output price inflation will accelerate in the next three months, above the long-run average. Anna Leach, deputy chief economist at the CBI, said: “UK manufacturers have become noticeably gloomier in September.”
However, arguably the three-year Brexit wrangle has had its repercussions well beyond the UK as manufacturing supply chains are so closely interwoven across the EU. The effects of the reduced value of £Sterling against the Euro and other currencies has added significant costs to importing of raw materials and components, which has had a significant impact on the automotive industry particularly.
There is little sign that the politicians will shift their stance on the big issues but the one element that so far does not seem to have been factored into the arguments is the effect of climate change and the damage to the environment.
This is an issue that has become so pressing that it is just faintly possible that it could prompt a radical rethink in the way businesses trade globally, the way goods are manufactured and what goods will, or should, be made in the future, and above all on how national and global economies should measure economic success.
Perhaps this presents an opportunity for SMEs to come up with new and innovative ideas that will promote sustainable growth without the endless competition that currently seems to dominate the discussion?

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Banks, Lenders & Investors Business Development & Marketing General Rescue, Restructuring & Recovery Turnaround

Can the UK have a balanced economy?

A new YouGov poll of voters has discovered that at least 85% of them want to see a strong emphasis put on manufacturing by the next government believing that there will be greater economic security in a more balanced economy.
The British Chambers of Commerce (BCC) has also warned recently that the recovery could risk being stalled unless more is done to balance the economy away from a disproportionate reliance on consumer spending.
ONS figures show that manufacturing makes up just 10% of the UK economy despite chancellor George Osborne’s call for a “march of the makers” in the early days of the current coalition government.
But why are we surprised?  Industry, particularly but not only construction, regularly highlights difficulties in recruiting people with the right skills and this is the result of years of neglect.
Young people have not been encouraged to believe in, or aspire to careers using practical skills, in fact quite the opposite.
Inevitably, even if a shift of emphasis and a change of direction that encourages young people and others to value the training acquired through an apprenticeship or college as highly as a degree currently is, it will take some years before the skills imbalance can be corrected.
Then there is the question of whether manufacturing can ever compete in an export market that includes China, India and others, where production and wages costs are so much lower than in the UK.
And finally the question of funding where investors in particular for some years have disliked industries that tie up capital and have high fixed overheads, whether this is due to perceived risk or the long-term nature of such investments.
Is it already too late to revive an industrial base in the UK (or possibly England given today’s vote on Scottish Independence) and what kinds of goods can we manufacture in such a way as to be competitive?

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Banks, Lenders & Investors Business Development & Marketing General Rescue, Restructuring & Recovery Turnaround

Is it Realistic for Private Businesses to Employ more Staff in 2011?

The majority of businesses in the UK are defined as small and employ fewer than 50 people while only one per cent of UK companies employ more than 1000 people.
Small businesses would generally be defined as having fewer than 50 employees, assets worth less than £5 million and a turnover less than £5 million, yet they account for two thirds of the UK’s private sector.
The Government is pinning its hopes of recovery on dramatically and quickly reducing the country’s budget deficit with a combination of cutbacks, including making an estimated 330,000 people in the public sector redundant, a figure revised downwards in November 2010 from its estimate of 490,000 the previous June.
This revision, albeit in human terms still a large number of people, is based on its forecast for growth in the economy in 2011 of 2.1% for all of which it relies on the private sector – the majority of which is made up of small businesses.
Economists and politicians are both emphasising that the opportunities for growth lie largely in increasing exports on the grounds that there is a burgeoning middle class in the fastest growing economies, like China, India, Brazil and Russia (the BRICS) with a growing appetite for sophisticated technology and household products.
But while this might be an option for businesses involved in manufacture it does not help those many small businesses providing services and products to local businesses and consumers in the UK only.
The UK manufacturing sector currently accounts for 26% of Gross Domestic Product (GDP) and the Government’s Department for Business, Innovation and Skills (BIS) published a White Paper proposing to expand adult apprenticeships by up to 75,000 by 2014-15 and to set up a new £50 million Growth and Innovation Fund, with financial support to SMEs to co-fund the costs of training for lower skilled employees.
Help with skills training by 2014-15 is hardly much use in 2011 and in any event growth will depend on being able to both increase sales and availability of finance from the banks to fund the additional working capital needed to support them.

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