To continue, from number 4 to 7 it belongs to the governmental forces and are the most significant for competitiveness in a country. They are the contributory government forces. (Aleda V. Roth, Craig A. Giffi, Atanu Chaudhuri, Hans Roehm, Deloitte, June 2010, Global manufacturing competitiveness index, p7).
To finish, the three last ones are less important because they concern more local competition, they are 'localized' (Aleda V. Roth, Craig A. Giffi, Atanu Chaudhuri, Hans Roehm, Deloitte, June 2010, Global manufacturing competitiveness index, p7).
You can see on appendix 2 the classification of these drivers according to several countries: the United Stated, Mexico and South America, Europe and Asia. And then, in appendix 3 the classification of countries according to their competitiveness and the possible evolution in the next five years.
Regarding the competitive environment, China appears to be the main competitor. Indeed, it attracts a lot of foreign direct investment, and joint venture as it's the first destination for delocalization thanks to its low cost skilled labor force, China is well develop concerning the 'talent' factor with 'abundance of highly skilled workers, scientists, researchers, and engineers contributes to a high rating for talent-driven innovation' (Aleda V. Roth, Craig A. Giffi, Atanu Chaudhuri, Hans Roehm, Deloitte, June 2010, Global manufacturing competitiveness index, p15)). Furthermore, Chinese government is engage to improve science, technology and infrastructure investments 'to accelerate the technological value-add of Chinese production and innovation' (Aleda V. Roth, Craig A. Giffi, Atanu Chaudhuri, Hans Roehm, Deloitte, June 2010, Global manufacturing competitiveness index, p15). To finish, China is an international platform, in fact it is open all Asian countries, America and Eastern Europe.
Then, on the following figure is explained the advantages and disadvantages of China policy. And you understand that the two disadvantages are the healthcare policy and the immigration policy (which create economical problem because it can repel foreign investors.
Nevertheless, since China is developing more and more, its currency is increasing and with it the price of products increase, in China but also in China's consumers like European countries.
But to understand better the situation in UK it is more relevant to study the case of France which is a country similar to the UK.
During the past 30 years, France as UK has suffered from deindustrialization, companies going abroad to find better labor conditions and make more profit. In France, between 1980 and 2007, France manufacturing lost 36%of its workforce which means '1,9 million jobs deleted according to the general direction of economical and treasury policy' (L'expansion.com, 22nd February 2010, Gros plan sur la désindustrialisation de la France). Then, in 2009 the economical crisis increased the problem creating 200000 unemployed, which had a very bad impact on the GDP that fall from 24% in 1980 to 14% in 2007. But it is important to underline the fact, that in the numbers concerning the unemployment some people left the manufacturing sector and find new jobs in services (L'expansion.com, 22nd February 2010, Gros plan sur la désindustrialisation de la France).
One of the most important challenge in our actual society is the environmental factor with the global warming problem. That's why manufacturers have to adapt their factories to new standards. So it could be good to recommend the manufacturers to focus on low carbon products and supply chain, which will allow them to be on top at the innovation level. Indeed 'there is a real opportunity for UK companies to benefit commercially from the move to low carbon by developing low carbon products and processes for the world market' (CBI, Chris Cassley, October 2010, CBI Manufacturing, Manufacturing in the UK, p4).
UK managers should focus on innovation and to reach this goal they have to invest in R&D because their own installation are too old so for 'higher value goods and services will require stepped up investments in R&D, skills, modern production and logistics technology, and IT to support more sustainable competitive advantages' (ISC, Harvard Business School, Professor Michael E Porter and Christian H M Ketels, May 2003, UK Competitiveness: moving to the next stage). Indeed, customers are looking not only for low cost but also at good quality, personalized and high value added products.
Recommendations government: see appendix 1
To develop properly the manufacturing sector needs helps from its government, so here are presented some recommendations the government could follow.
First, concerning the environmental issues, it is a difficult topic as the technologies to decrease the carbon rejection are expensive which rise the prices, and put the UK manufacturer in an uncompetitive position as it said in the CBI report: 'the competitiveness of energy intensive industrial sectors could suffer as their total energy costs rise ' (CBI, Chris Cassley, October 2010, CBI Manufacturing, Manufacturing in the UK, p4) However, if the government want to help the industries changing, they should tax less the factories that decrease their carbon rejection rate to help them survive. And then for the most risky factories 'the possibility of exemptions from the costs of new climate policies for the most at risk of carbon leakage must be developed' (CBI, Chris Cassley, October 2010, CBI Manufacturing, Manufacturing in the UK, p4).
Manufacturing in UK has been present for many years and so the infrastructures are very old, some are not ready to welcome new technologies or even have not security standard. It concerns also infrastructure for transportation which could handicap the supply chain efficiency because of 'weak and deteriorating physical infrastructure (i.e. railways, ports and telecommunications)'(Institute of Strategy and Competitiveness, Harvard Business School, Professor Michael E Porter and Christian H M Ketels, May 2003, UK Competitiveness: moving to the next stage). So the government should invest in renovating these infrastructure to prevent eventual accidents.
Keep manufacturing, china currency increase so price increasing in china then in europe so no longer valuable to go there
The CBI, in its Visions and Ambitions report, called on the Government to make manufacturing a key plank of economic development by creating a tax environment that encouraged investment, while also offering business support and improving skills Â-levels.
Director-general designate John Cridland said: "UK manufacturing is in many ways the unsung hero of our economy. Big productivity gains in the past 10 years have made it leaner than ever before and it's now well placed to lead the country's Â-economic recovery.
"To achieve this, however, the Â-Government must act fast. It should build on the sector's strengths, work with business to harness its innovation and create a tax and regulatory environment that helps UK manufacturers drive up growth.
"We want the Government to be ambitious: focus its support on the sectors with most export growth potential and improve the UK's Â-competitiveness as a place to invest."
(City and business, December 6 2010, Manufacturing powers ahead in UK recovery).
Better tax system
Increase education: "The quality of UK management skills and the effectiveness of management training need to be assessed in a consistent, comparative way at multiple levels of management: (5forces)
Despite its image and perception, the UK remains a leading global manufacturer, formed of varied and different sectors, each of which provide jobs, drive economic growth, developing new skills and technologies, while making a significant contribution to our export markets.
Policy makers must understand the significance of manufacturing and its place in the UK economy. This is vital if our manufacturers are to compete internationally and be at the forefront of the global manufacturing base.
Government must engage with business in harnessing the potential of manufacturing, providing leadership and ambition that strengthens our existing industrial base and its place in the wider economy.
If the UK is to continue as a leading economic power in the 21st century, a growing, diverse manufacturing base must be at the core of this process.
(CBI, Chris Cassley, October 2010, CBI Manufacturing, Manufacturing in the UK, p4).