Manufacturing is the improvement of materials, value is added, people employed, wages and taxes are paid, services are provided. It produces high net returns for both the company and the taxman since it increases, rather than just recycles, wealth.
It is a myth that the UK cannot ‘do’ high volume production. Of course it can, it is just that when a small firm develops an innovative product and gets bigger to increase production, it is descended upon with planning laws, outdated legal restrictions and heavy taxation, so companies play a game of cat and mouse with both the outpouring of regulations and tax demands. Now corporations are being brought to book on their overseas sheltering of tax liabilities, and being challenged about outsourcing to other countries without setting standards of care for their workforce, and standards of behaviour for their management.
An outsourcing order for a domestic product from a country outside the EU may contain dozens of pages describing minimum testing, material and performance requirements but no minimum standards of working conditions for the labour to make it even though these standards are enshrined in our own laws. The reason for this is that if a corporation turns a blind eye to conditions of outsourced labour, then import prices will inevitably undercut home prices.
Since it is unlikely that there will be international agreement on working conditions or that UK industrial and taxation laws will be relaxed, a new approach to manufacturing is needed.
The industrial revolution started in Britain and labour moved from cottage industry to factory production, so establishing the concept of ‘economy of scale’. This concept is now used by our competitors to create even cheaper products and hence undercut our own more regulated systems.
Volume factory output by Far Eastern companies relies not only on the use of machinery but also on a large workforce of variously skilled people in large factories. Strangely, this method has hardly changed since the industrial revolution, even though huge advances have been made in communications between people and between people and machines. Furthermore, both the materials used and the size and repeatable quality of products have changed dramatically. Mobile phones were once the size of a brick and microwave ovens were yet to replace huge cookers. Once many different piece parts were made under one roof to ensure that they fitted together, now quality parts or sub-assemblies can be made anywhere in the world and delivered ‘just in time’ for final assembly.
The time is right therefore to review the whole philosophy of manufacturing, and consider returning to the ‘cottage industry’ model for both pre-production and even some manufactured products (The Manufacturing Institute has already ‘seen over the hill’ in this context with its promotion of digital manufacturing).
Advanced IT has made market and technical research, IPR, design and development, prototyping, and small part production possible from the home. Consider first that more or less every home has a computer perfectly capable of operating both CAD (computer-aided-design) and CAM (computer-aided manufacture) software. Add to this the fact that for many years homeworking has been producing finished text and data for the 2D publishing, legal, accountancy and insurance industries to name a few. With 3D prototyping now becoming a reality, much of the pre-production for modern manufacturing can be done within the modern home or within a cluster of homes or the small ‘office campus’. In addition, many plastic parts can now be moulded/machined in small, clean, self-contained machining centres, which will easily fit in a small shed. The ‘Dark, satanic mill’ is a thing of the past.
The technology already exists for outsourcing the batch production of products and parts of products to the home. There is also the added advantage of not needing workers to travel. This is another bonus when the argument for reducing emissions is addressed. This new cottage revolution can be structured to serve the skills of the workforce. The RSA seminar revealed that the UK has the highest proportion of ‘consumer/innovators’ in the western world, so the tasks set for the homeworker can range from simple assembly right up to design and development. Current Far Eastern labour could not compete if these assets were fully harnessed in the UK.
The pressure to continually improve products in the global marketplace has made IPR more important than ever, and to unlock the potential of this army of consumer/innovators it must become central to the cottage economy. So too, must new planning laws. The laws governing employment must be brought up to date, so that an individual working from home is as protected as one working in a factory. Finally, taxation and wage structures must be tailored to suit individuals and their circumstances. Britain started the last industrial revolution so it is fitting that it should start the next one.