Negative trends
- Internationally exposed: globalisation and increased transport has moved many manufacturing jobs away from West Midlands and UK. Now less than 15% of WM jobs, though still the highest of the UK regions.
- Upscaling of manufacturing often means reducing jobs to a single part on a production line. Aside from job satisfaction, some business research shows that a better product is created when workers are involved throughout the process.
- Within the WM, there are fewer but larger manufacturing companies, which are more centred on export and therefore only want to site near motorway network and biggest cities. The ‘just in time delivery’ concept results in unnecessary transit of goods.
- Business lobbies such as the Chamber of Commerce seem to accept and encourage the outsourcing trend
- High-skilled/high tech jobs are moving too and may not be brought back by high oil prices
- Short-lived trends make it difficult to provide trained workers; manufacturing can move into new sectors before workers have the skills needed.
- A reduction in local entrepreneurship because small businesses are more likely to fail.
- The distances goods travel reduce our resource efficiency: material flows don’t allow for returnable drinks bottles, for example.
- Repair industry is often unviable because goods manufactured in low-wage countries are cheap, leading to depletion of raw materials.
Positive trends, good practice and opportunities
- Resources available in the West Midlands: reclaimed materials from local household and commercial waste; food crops; fuel crops; textile crops (wool, linen, hemp); the byproducts of any existing production; landfill gas, some minerals and aggregates.
- West Midlands public procurement, including the biggest local authority in Europe (Birmingham) could be a major market for local manufacturing.
- High oil prices may bring return of ‘heavy’ products nearer to their markets, with benefits to resource efficiency, climate change and local multiplier. (Although prices have reduced at time of report release, the long term trend is likely to be higher)
- Regional economic strategy supports low carbon products and services which could boost localised production and supply chains.
- An Attwood Group snapshot of some WM regional manufacturers includes 38 manufacturing/mechanical engineering businesses from carpets to plastic piping to buttons to bicycle assembly, many of whom are thriving.
- Black Country Housing Association had been buying ‘sun pipes’ from overseas for housing and instead persuaded a local contractor to make them in the Black Country, bringing £1/4 million and 60 jobs to the local area and reducing transport.
- National Industrial Symbiosis Programme (NISP) – began in the WM, making productive links between companies’ material flows and logistics. Makes CO2, financial and resource savings in reducing landfill, incineration and transportation. Tends to work with larger businesses.
- The Distributed Economies (DE) model – developed by the International Institute for Industrial Environmental Economics in Sweden – takes the NISP approach further, networking SMEs to make use of local assets, skills and markets to create a locally relevant economy. A scientific approach to a sustainable model.
- Fair trade: some fair trade or co-operatively manufactured products (textiles, gifts) are available so that West Midlands consumers can support localisation benefits and fairer wages in developing countries, but as a very small ‘niche’ activity.
Potential recommendations
- Public sector, third sector and business with social/environmental objectives can play role in supporting positive local manufacturing development.
- Role for economic development in identifying local needs and linking with local assets and markets as per DE approach
- Evidence-based investigation of the impact on the region’s manufacturing of an inward investment and outsourcing centred approach to economic development.
- See also local ownership and control recommendations of Finance section.
- Investigate how to encourage reuse of materials – using NISP; minimising incineration, economic development interventions, policy changes, taxes on raw materials.