British Industrial Revolution - Coursework Example

Introduction For forty six years, Howard has steered his small steel manufacturing company in Manchester fairly well. He has invested in new machines, replaced the same after wear and tear, and watched as his small fortune accumulated. Within the same period, Howard has forlornly watched as the manufacturing industries in Britain go down a declivity. Manufacturing has been systematically replaced by the service industry making Howard and his small company a forgotten oblivion. Howard’s is the story of the British manufacturing industry. In the course of the past 100 years, the sector has undergone a lot of transformation. It is important to note that Britain is always considered to be the cradle of industrialisation and this being the case, any developments in the country’s manufacturing industry can be taken as a reflection of the developments in the world’s manufacturing sector in extension. British’ manufacturing industry was one of the most powerful, both locally and internationally but it has now been decimated to a negligible level. Prior to investing in his lathes and other machines that he needed to start his company, Howard was part of a society where more than fifty percent of the labour force was involved in the manufacturing industry. This industry was composed of steel manufacturing, mining, and ship building among others. Today, Howard watches from the sidelines as the same industry employs less than 15% of the country’s workforce. The service industry has taken centre stage. Manufacturing is now considered to be an old profession. No college student in his right mind wishes to graduate only to be employed in the manufacturing industry. Even Howard’s three sons, all of whom have completed their college education refused to join their father in the company. They have opted for other lines of profession. De-Industrialisation of the British Industry The discourse outlined above has led to a divide within the economic analyst ranks. There are those people who are of the view that the country is so de-industrialised to the extent that service industry is over manufacturing. This is especially after a report was released by the National Office of Statistics indicating that today, more people are employed in sandwich manufacturing companies than in steel manufacturing industry. The food industry in the service industry has become one of the major employers to surpass manufacturing. On the other extreme of the divide are those who proscribe to the view that the country is developing its businesses-as far as industry is concerned-according to the dictates of modern market evolution. The modern market evolution dictates that the service industry for a developing economy should always surpass the manufacturing industry. This is given the fact that most of the activities that are involved in production nowadays incorporate some component of information technology. This, coupled with mechanisation, has drastically reduced the number of people that are involved in the manufacturing processes. According to Luckock (2008), the British economy is the world’s sixth largest by nominal Gross Domestic Product (GDP). As far as purchasing power parity is concerned, the country ranks seventh in the world. When it comes to market exchange rates, the country can be considered to be the world’s sixth largest economy. In this respect, the country ranks third in Europe after Germany and France (Russell 2009). The industrial revolution started here with the establishment of heavy manufacturing industries. The industries were shipbuilding, coal mining, steel manufacture and textile industry. It is through this process that this country became dominant in the international market arena in the 19th century. Other nations adopted industrialisation from the United Kingdom. But something negative was happening to the one in Britain. The two world wars, in which the country was deeply engaged, took a toll on the economy. The country lost her competitive edge. The twentieth century saw a progressive decline in the manufacturing industry, especially heavy manufacturing. Despite the fact that it remains one of the country’s main economic activities, manufacture declined to account for a mere fifteen percent of the national gross output in 2003 (Howard 2006). Britain: Manufacturing Economy to Reckon with Rt. Honourable Stephen Timms, the minister for digital Britain, under which the manufacturing docket falls, is enthusiastic about the prospects of the manufacturing industry in this country. Quoted by the Department for Business Innovation (DBI) (2008), Timms is of the view that this is a central facet of the British economy. It accounts for about one sixth of the country’s wealth and two thirds of Britains export (DBI 2008). About three million people are employed in this sector, a significant number by any standards. Timms goes further to say that “Britain is the sixth largest manufacturing economy in the world” (DBI 2008). A pointer to this is the fact that the country is today manufacturing twice as many cars as it did a quarter of a century ago. The truth of this matter is underscored by the fact that about seven of the world’s top motor manufacturers are based in Britain (Gregory 2008). This includes Chevloret, Ford and BMW among others. Timms is of the view that 19 out of the top twenty auto parts makers carry out their activities within the British boundaries. The role that the motor industry under manufacturing plays in the world economy cannot be ignored. It is noted that more than seventy five percent of the cars that are manufactured in this country are exported to various parts of the world (Gregory 2008). Industrialisation of the Service Industry With the decline of the manufacturing industry, there has been a gradual-and sometimes exponential-rise in the service industry. According to Abigail (2009), the British economy now resembles that of other industrialised nations. It is now an “eighty/twenty” economy. This means that eighty percent of the economy is made of services while the other twenty percent is made of manufacturing (Luckock 2008). This fact remains whether one considers the GDP of the country or the proportion of the labour force that is employed in these two sectors; they all indicate an “eighty/twenty” phenomenon (Adeloitte 2008). A fact that is worth noting in this respect is that of the service productions in this country; some of these services are what Agate (2008) refers to as non-tradeables. What this means is that though these services are produced, and though they account for a certain percentage of the GDP, they cannot be traded on the international market. As such, they are not open to international competition. Alternatively, even if they are open to this competition, it is not much. They include health services, education, hairdressing and others like dry cleaning (Agate 2008). But others are tradeable. They are open to international competition since they can be delivered to the international market for trading. They include film production, music, literature and financial services. Others are travel services like air travel. It is equally important to note that the proportions of exports that are made by Britain to other parts of the world economy are largely made up of services, rather than goods. They include financial services, considering the fact that London is a banking hub in the world (Turner 2008). The construction industry, as of 2004, added a gross value of £64,747 million (Wallace 2009). Another major player in this industry is the wholesale and retail trade. This sector is made up of motor vehicle trade, motor vehicle repairs and personal together with household goods exchange (Russell 2009). In 2004, these services accounted for £127,520 million of the country’s economy (Wallace 2009). In the same year, hotels and restaurants, through their services, accounted for £33,074 million, communication £29,762 million while the contribution of the transport and storage was £49,516 million (Wallace 2009). The city of London is the global leader in financial services provision. This is composed of the London Stock Exchange, London Metal Exchange and Lloyds of London, an insurance firm which is famed for its coverage of ships and other seafaring vessels (Mabraska 2009). There is also a conglomeration of banks in this catty which include: the Barclays Bank, Citigroup and others. Employment in the Production Industry According to BBC News (2007), large employers in the economy in 1907 included ship builders, steel manufacturers among others. All of these were manufacturing industries. In the year 1907, almost a century ago, the Office of National Statistics conducted its maiden census in this sector and interesting facts were revealed (BBC 2007). This census revealed that in 1907, 1.4 million wage earners in Britain earned their living from the colossal steel making and shipbuilding industries (BBC 2007). On its part, the deep coal mining industry employed around 837,000 labourers. This is significant given that at this time, this sector (coal mining) accounted for a measly 25% of the total British industrial production. However, the people employed in this sector reached 1.2 million in the year 1924, according to another census conducted this year (Adeloitte 2008). This picture changed again in the year 2002, a time when the coal mining sector had been almost eliminated from the face of our industries. Only 8,000 people were employed at this time in this industry (Adeloitte 2008). The number of people that were employed in the motorcycle and bicycle manufacturing industries in the 1940’s and 1950’s was also large. This is due to the fact that the demand for these products was also high at this time. In 1954, 44,500 people were employed in this industry (BBC 2007). But compare it with the picture today, only a fraction of these are needed to keep this industry, or what is left of it, running. The following figure will put this picture into focus. Source 1: http://tutor2u.net/economics/content/essentials/manufacturing_industry_in_uk.htm Today, a total of three million people make their living from the manufacturing industry. This is as compared to almost seven million, as indicated above, about a century ago. This is an indication of the decline that is faced by this industry. But despite this, productivity has increased by 90% over the past fifty years. From 1980, manufacturing has risen from 84 to 97% (Agate 2008). This is a 15% rise in the course of a quarter of a century (Turner 2008). The Rise of the Aerospace Industry This industry was non-existent when the Office for National Statistics conducted the census that has been alluded to above. By the year 1924, when the census was conducted for that year, the aerospace industry was included. It employed 12,700 people at the time (Clark 2007). This is significant considering the fact that the industry was relatively new at the time. In the year 2004, the industry employed about 101,000 people (BBC 2007). It is estimated that Britains aerospace industry employs about 26% of all the aerospace employees in Europe (Russell 2009). This is given the fact that this industry is one of the strongest and largest in the continent. This is despite the fact that the industry has to deal with competition from France, which employs about a quarter of all the staff in this industry in the continent. Rising Wages In recent years, there have been rising wages in the economy. This has led to the struggling of labour intensive industries e.g. manufacturing, as they try to compete with low economies in Asia and Eastern Europe. This rise has been attributed to, among others, unionisation of the workers. The workers have been able to fight for their rights and as such, they have been able to effectively campaign for the rise in their salaries. Mechanisation of the Manufacturing Industry Mechanisation is one of the hallmarks of industrialisation. This is because as new technologies continue to evolve, people come to realise that a piece of work that takes ten people to perform can be performed by a single machine within the same time frame (Howard 2006). As such, it is realised that mechanisation makes production cheaper, as it cuts down on the costs of production. Mechanisation started in the textile industry. This is with the invention of the Awkright frame for spinning. The upshot of this is that fewer and fewer people are now employed in the manufacturing industry. The motor assembly line for example has become largely automated and it is robots and other machines that conduct such activities as painting and body work, together with joinery. These activities were hitherto performed by human workers. Developments in Britain’s Industry A look at the British industry will reveal that in the course of the past 100 years, declining industries such as steel, deep coal mining, ship building and textiles have been replaced by other industries like pharmaceuticals, electronics and aerospace. The new entrants in the industry are both successful and less labour intensive. What this means is that, for example in electronics, fewer people are needed to produce goods of the same value as in textile. Given the fact that these industries have been on the rise, it is no wonder then that fewer and fewer people are employed in the manufacturing industry. This is because the new manufacturing industry needs lesser people. Conclusion The fact that many people are now employed in the service industry e.g. food production, than in manufacturing e.g. steel production, does not mean that Britain is becoming de-industrialised. Rather, the country is developing its businesses in accordance with the dictates of modern market evolution. History has proven that industrialisation moves from labour intensive manufacturing to less labour intensive service production. The shift from manufacturing to service production is the hallmark of industrialising, or an industrialised economy. This is what has happened to Britain; she has merely been industrialised. 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