The common perception of manufacturing as a shrinking sector within mature economies may be accurate.
It is also overstated.
But this is not the whole picture.
In the United States, for example, manufacturing has been shedding jobs for two decades. Yet manufacturing output has increased by 15% because modern management and technology have created huge gains in productive capacity2.
Similarly, in the UK, the underlying strength of the sector was reflected by a purchasing managers’ index at record levels in early 2011 as well as employment rising at a record rate and exports growing too3.
None of this is to underplay the intractable challenges which manufacturers in these mature economies face – notably, competition from the major emerging markets, rising costs for fuel and materials, challenging taxation regimes and skills shortages.
It is therefore encouraging that manufacturers themselves are clearly looking to emerge from the recession and other shocks stronger, fitter and positioned for future growth.
This is evidenced by creative tactics adopted to minimise redundancies, protect the skills base and retain productive capacity with a view to competing for market share in a recovering economy4.
The true competitors are using the downturn as a launch pad for long term growth. They are cutting costs without slashing their ability to respond when opportunity returns. They are taking market share and taking advantage of cheaper capital equipment and competitively priced talent. They are making the most of discernible green shoots such as the long term drive to a low carbon economy5 and its anticipated transformation in the products we are all likely to use in future.
Somebody will need to make these and, after all, manufacturers exist to make things.
Through recession and growth alike, the most successful manufacturers make something every customer will always want.
They make a difference.
With an innovative product. A better tool for performing a familiar task. An improvement in day-to-day living.
By focusing on this mission through relentless R&D, ruthless quality control and robust relationships throughout the value chain, manufacturers can look forward to good prospects as economic growth returns.
Should they decide their focus can be sharpened by shedding peripheral functions and business processes, Xchanging is ready to provide the necessary support.