Outlook: A mobile future in manufacturing

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FOR A thumbnail portrait of the changing face of British industry, you could do no better than yesterday's figures for the past year showing textiles output down 9 per cent, metals (including steel) down 6 per cent, but production of mobile phones and pagers rocketing 45 per cent.

The once proud textiles industry has been in decline for thirty years. It has not enjoyed any recovery in output since the trough of the recession in 1992. Competition on cost from emerging economies in a labour-intensive business has proved too stiff at any level of the exchange rate, and certainly with today's strong pound.

So we have gone from cloth caps and steel-capped clogs to mobiles within a generation. The lesson is that the future of British manufacturing lies in industries that can compete on more than cost alone. Pharmaceuticals is one example - including biotechnology, if the green lobby does not strangle its development in the UK.

Mobile phone production is another. So much do Britons love their mobiles that we account for nearly 15 per cent of the European market; and a thriving domestic market is important for any industry. Plants in the UK also produce for export, with buoyant demand helping them overcome the effects of sterling.

Perhaps unfortunately, the manufacturers of these devices are virtually all foreign-owned companies, as in many other technologically-sophisticated parts of British industry. But never mind: they create jobs, source from local companies, and generate export revenues.

The transformation carries two messages for both government and industry. One is the importance of the science and technology base for the future of the economy. The other is not to get too carried away by any sentimental attachment to the older industries: textiles and steel still resonate but they account for only a small share of British industry's output. For public policy purposes, they scarcely deserve a look in.