Winning the future markets for UK manufacturing output
- Document type
- Peng, Mike W; Meyer, Klaus E
- Date of publication
- 30 October 2013
- Future of Manufacturing Project: Evidence Paper 25
- Management & leadership: including strategy, public sector management, operations and production, Trends: economic, social and technology trends affecting business
- Business and management
- Material type
A paper draws on the resource-based and institution-based views, two core perspectives from the discipline of global business and strategy, to probe into the drivers behind UK manufacturing exports. UK goods exports declined from a world share of 5.2% in 1991 to 2.6% in 2011. The UK is the 11th largest goods exporter and 9th largest manufacturing nation (by gross value added). In absolute terms, the value of UK manufacturing exports grew by 46% between 2000 and 2011. However, the UK’s relative decline in manufacturing exports appears to have accelerated in the last decade, against both emerging economies and European peers. Absorbing 53.4% of all UK goods exported, the EU is the most important export destination. Although growing fast, exports to BRICS only represent 7.7% of all UK exports (of which 2.7% go to China). The Great Transformation of the global economy is likely to propel China, India, Brazil, and Russia, together with the United States, to become the top economies by 2050. However, UK manufacturing exports are currently not well positioned there. In China and Russia, the UK only commands 0.9% and 2% import market share, respectively. Two scenarios of the world in 2050 can be described as (1) “continued globalization” and (2) “de-globalization.” Both scenarios have in common that emerging economies will grow faster than today’s mature economies. We predict UK manufacturing firms to continue to excel in industries in which the UK has revealed comparative advantage, such as aerospace, automobiles, chemicals, and pharmaceuticals. They will also be competitive in high-end niches, such as equestrian goods and leisure marine transport. In manufacturing industries using new technologies, the most promising ones include additive manufacturing (3-D printing), smart grid, tidal and wave energy system, new batteries, and intelligent medical devices. Recommendations are made to both industry and government in the light of these results.
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