The Importance of Manufacturing - Essay Example

Running Head: Business Economics Business Economics [Institute’s Business Economics Introduction The importance of manufacturing has to be realized and this fact has been argued by Smith and Grant (2003) by the countries in need of the developed economies. In the past the fact accepted was that among all the countries in the world, United Kingdom is the one industrialized state and has a developed economy. Moynihan and Titley (2001) have said that United Kingdom was the first country to revolutionize. It is the first industrialized country. However, these days the same country has been undergoing de industrialization. Body These days it has been noticed that United Kingdom is undergoing the service revolution. There are many reasons behind this phenomenon. Kapferer (2008) has argued that one of the main reasons added in this list is that United Kingdom had been counted among the agricultural sector but now the country’s agricultural sector has been replaced with the manufacturing one. This replacement took place during the end of the eighteenth century. Since then economic growth seen in the United Kingdom has been because of the manufacturing sector rather than the agricultural one. Recently the manufacturing sector has been replaced by the service sectors. The effect of manufacturing as well as the service sector on the economy of United Kingdom has to be kept in mind. The replacement of the manufacturing sector with the service sector might be one of the main factors because of which the economy of United Kingdom has been affected. Here the main factor that affects the economy of United Kingdom is de industrialization. The term de industrialization needs to be defined as it has been used very frequently. In the business world the de industrialization is rather a concept and by many researchers it is defined as a decline in the ratio of the workforce that work in the industrial sector of the particular country. Ingram and Hong (2007) have argued that the greater the work force in the country, greater is the economic boom and greater is the development. There are many measures that have been seen to affect industrialization. Some of the main factors that have been counted to analyze the de industrialization within the country is the number of the people that are employed in the manufacturing industry within a certain country. Moreover, some of the other main factors that have been added in this list is the manufacturing output in the form of the export and imports that are generated from this manufacturing industry. As de industrialization has been the main change noticed in the country, the change in the manufacturing industry is the one that is growing in the UK. That means the manufacturing industry and its effects are to be observed in the country as well. One of the most striking indicators that have been noticed by Griffiths and Wall (2007) in the UK market is the decline in the employees working in the manufacturing sector of the nation. In the year 1960 it was noticed that the total number of employees who were working in the United Kingdom industrial sector was 8,851,000 and this number represents 34% of the total working population of UK in that years. In the year 1994 it was noticed that the number of employees in the manufacturing sector of the United Kingdom had fallen to nearly half. The number of employees in that case was 4,639,000: this number represents 18.6% of the total employment of the employees in the UK. Recently Giugni (2009) noticed a shift in the comparative business advantage on a global scale. The changes are concerned with the changes in the goals that have been defined in the case of the manufacturing goods and their imports and exports. These goals have been considered when the de industrialization is taken into account in the United Kingdom. If this situation is compared with that of the other countries, especially Japan, it can be said that the labor costs are higher in Japan and this increases the rates and the economic gains from the imports and exports. In addition to this if Japan imports greater than the country that exports its products into Japan that country can have advantages over Japan. These imports can decrease the country’s own manufacturing and this has been observed in the recent years in the country. The production of certain goods in the country can be seen to be halted in an overall manner. Another observation made is the decrease in the employment levels in the country that can have an overall negative impact on the country’s economy. Rover is one of the companies that have illustrated the same fact in a rather stronger manner. One of the main reasons that have been seen for the failure of the company has been an increased import in the country and no exports and this has been followed by a great decrease in the product demands, and thereby, the exports. Many technological advances have been noticed in the UK’s industrial sector and this includes the industrial sector and the changes in the production as well as the logistics, superior management structure of the manufacturing industries. Researchers including Emadi-Coffin (2002) have observed that the service sector is the one whose jobs and the employment depend on the manufacturing sectors. In several cases there are many manufacturing employees who have been sacked as a result of the companies especially the Rover, and these manufacturing employees can be hired for the service industries. The service sector jobs have been filled in by the manufacturing sector employees. On the other hand it has been added by the researchers that the jobs lost in the manufacturing industry cannot be simply absorbed by the service sector. Employment in the service sector is required in a higher numbers. Thereby it can be said that all the fallouts from the manufacturing sector cannot be fitted into the service sectors. Griffiths and Wall (2007) have argued that the manufacturing sector in Britain has to be analyzed and there are a number of measures that can be associated with the concept of de industrialization. In the previous years it was noticed that the manufacturing sector has been the greatest economy creator in the united kingdom but it is the UK’s manufacturing sector in which the employees and the ratio has decreased since some years. This is the trend that has been noticed in the last thirty years. However, the output of the manufacturing industry has been increasing since many years. Recent trend in the manufacturing and the service sector has been that the output per employee has been increasing as compared to the other sectors. In the case of Britain an observation made is that the manufacturing sector has not been kept afloat since some years. If the exports are declining in the country, the imports are also affected. However, in this case the main conclusion that can be drawn is that the manufacturing sector in Britain has been declining steadily as the exports as well as imports have been decreasing. Thereby, the observation is that the manufacturing sector needs to increase the exports as well as imports. The other issues faced are that the country will fall behind countries such as Japan. Altena and van der Linden (2002) have observed that the industrial bases in the country have been shrinking and export has been posing a threat to the economy of the country. In this case the main need that has been realized is that there is a change needed in the industrial policies of the country. In the recent years the manufacturers in the country have been affected by an economic boom. Exchange rate mechanism has affected the higher interest rates and caused an increase in the exchange rates and these rates have led to an effect upon the capital structure of the British industries. Moreover, it has been observed that the export competitiveness has had a negative effect. The management of the health prospects of the industrial sector has been sharply divided. Researchers have argued that the de industrialization has been an inevitable change in the economic sector in the country. One of the main changes that have taken place in the country is the fall and demise of the smokestack industry and it has been sharply observed by the citizens of the country. The trust that the citizens had on the industries is the loss of the sentimentalities. Researchers have reported that de industrialization has been dangerously rapid in the recent days and these are the changes that need changes in the policies relating to the industries. It has been argued that the industrial sector has been seen as the secondary source of the better and an increasingly settled economy in the country and this industrial sector has produced some of the most tangible goods for the citizens. Researchers have added that the industrial sector’s primary state is where the industry manufactures the raw materials and these products include the agricultural goods as well as the minerals as these are natural. Moreover, researchers including Kapferer (2008) have added that the manufacturing sectors and the industrial base are the two main terms that have been used interchangeably. Smith and Grant (2003) have observed that the British de industrialization has been considered negative. There has been a decline in the employment in the British manufacturing sector and this trend represents the weakness in the British manufacturing sector. In this case the buoyant productivity growth has not been taken into account by the researchers to such an extent as has been the employment rates and ratios. It has been discussed by many researchers that de industrialization is inevitable and it can be proven by adding that as there is a rise in the living standards of the people there will be an increased number of people entering the buying services. The main result in this case is that there is a decline in the relative spending on the manufacturing goods. It has been argued that there has been no recent evidence of the changes in the spending patterns of the Britain. These spending patterns are changing from the manufacturers towards the services. On the other hand, it is not just the changes in the spending patterns and the consumption; in fact it is the uncompetitiveness of the manufacturers of Britain. There has been a sharp decline in the share of the manufacturers of UK and in the manufacturing events as a consequence of this. It has been argued that the manufacturers of the country have been seen to be internationally tradable and these, if compared to the services, are not tradable to this extent. In history it has been seen that the profits made in the services were higher than the manufacturing that there was no regulation required to maintain the rules. if the services are exported the gaps that are created by the manufacturing industries cannot be filled and the same amount of the profits that are required cannot be attained. If manufacturing is not raised, the inflation rates shall remain lower and stable and the exchange rates can become more predictable as well as lower. Thereby there are many changes that are required in the policies in order to increase the sales in the manufacturing. In this case the main era that has been seen is the era of the 1980s and it has been seen that this is the era where the economy of the country had been booming and increasing and the output of the country was increasing as well as the unemployment is the one that has been declining. The economic growth is the one that has been the same as that of the Japanese but in this case the manufacturing output is the one that was not showing any increases. The increase in the manufacturing was around 0.5% in one year and it has been seen that these are rates that have to be counteracted. British manufacturing industry has been highly affected by the economic crisis that has hit the whole world. It has been observed that there are many issues being faced by the manufacturing firms these days and these include the research and development as well as training. There are many firms that have not been competitive enough in order to sustain their manufacturing strategies. They have not been functioning well enough to maintain their exports to the other countries. Thereby it has been realized by Giugni, (2009) that there are many changes needed in the policies of the manufacturing industries and these include the increase in the relaxation of the taxes for the vocational training in the industries. There is a need of an increase in the educational funding that can increase the cooperation between the industries and the educational institutions. Training has been used to increase the productivity in the manufacturing industries. Dismissal legislations and the rules have to be revised and have to be analyzed for their unfair rules. Instead of terminating the staff the rules that the manufacturing industries have to follow is that they need to train the employees in a better manner. Conclusion The manufacturing sector has been replaced by the service sectors. The replacement of which the economy of United Kingdom has been affected. In the UK market has been noticed a decline in the employees working in the manufacturing sector. There has been a shift in the comparative business advantage on a global scale. The changes are concerned with the changes in the goals that have been defined in the case of the manufacturing goods and their imports and exports. There are many technological advances that have been noticed in UK’s industrial sector and this includes the industrial sector plus the advances including the changes in the production as well as the logistics, superior management structure of the manufacturing industries. There are many changes that are needed in the policies of the manufacturing industries and these include the increase in the relaxation of the taxes for the vocational training in the industries. There is a need of an increase in the educational funding that can increase the cooperation between the industries and the educational institutions. References Altena, B., and van der Linden, M. (2002). De-industrialization: social, cultural, and political aspects, Volume 10 of International review of social history. Cambridge University Press. Emadi-Coffin, B. (2002). Rethinking international organization: deregulation and global governance, Volume 9 of Routledge advances in international political economy. Routledge. Giugni, M. (2009). The politics of unemployment in Europe: policy responses and collective action. Ashgate Publishing, Ltd. Griffiths, A., and Wall, S. (2007). Applied economics. Edition 11. Financial Times Prentice Hal. Ingram, K. G., and Hong, Yu-hung. (2007). Land policies and their outcomes. Lincoln Institute of Land Policy. Kapferer, J. (2008). The state and the arts: articulating power and subversion, Berghahn Series. Berghahn Books. Moynihan, D., and Titley, B. (2001). Advanced business, Oxford GNVQ Series, Vocational A level. Edition 2. Oxford University Press. Smith, D., and Grant, S. (2003). UK current economic policy, Studies in economics and business. Edition 3. Heinemann. Read More