The main idea relevant to businesses stemming out of last week’s Conservative Party conference in Manchester has been the potential to create a market for SME bonds, following Chancellor of the Exchequer George Osborne’s announcement about ‘credit easing’ to help smaller companies. No one seems to know how this is going to pan out and how easy it’ll be for businesses to apply for funding. Though, it was good to see that all three party conferences have debated how we should rebalance the economy and create the right environment for the resurgence of British manufacturing.  (more…)

Technorati Tags: British manufacturing, Chancellor of the Exchequer George Osborne, Conservative Party, Consumer Electronics, Electronics Manufacturing, Eurozone, Freescale, global electronics industry, HP, NXP, OEMs, Philips

According to recent figures put out by the EEF, the electronics sector has seen weaker orders intake over the past three months, with associated concerns about output expansion for the next three months. Companies are indeed tightening the belt due to growing challenges in the global economic environment (the cost of gold has increased dramatically) and are taking their time to make investment and recruitment decisions. However, whereas big and medium size companies are better placed to offset losses, the case is slightly different for single-sited UK SMEs, where the loss of an important customer could be business-critical. The relatively short-term nature of SMEs’ order books in the electronics sector is certainly eroding confidence for some businesses. The UK government should acknowledge that and support smaller manufacturing companies, and allow them to thrive as in Germany where SMEs have been the catalyst for economic growth.

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Technorati Tags: DSEi, electronics, manufacturing, SMEs

There was, once upon a time, a global trend that caused multinational corporations to move towards locations where the cost of human labour was cheaper… Now this trend may cease and even reverse as industrial automation gets smarter, cheaper and cleaner. Who says that a modern, fully automated factory needs to be placed in the Far East indeed? (more…)

Technorati Tags: automation, backshoring, foxconn, Uk electronics, UK Manufacturing

The recent story of Bombardier losing out on the Thameslink train contract to Siemens has triggered talks over whether the UK should act like other European countries and factor ‘socio-economic’ rationales in public procurement policies, or, obstinately continue to be solely market-led. Awarding public contracts based on domestic industrial objectives in addition to a mere ‘value for money to the tax payer’ principle is not just a continental practice. Other western liberal economies have been pursuing similar exercises for many years. The so-called ‘buy America’ policy and offset agreements (especially in aerospace and defence) are good examples of how Americans are making sure their industrial base remains solid. It’s not just a matter of protectionism vs. liberalism – there are many ways policymakers can tackle the issue. Without going into philosophical debates here, the message is clear: It’s now time for the government to think outside the box. With no immediate prospect of new train orders, train manufacturer Bombardier has begun a 90 day consultation with staff at its Derby plant regarding plans to reduce the 3,000 workforce by over 1,400. How many times have we heard stories like this before? (more…)

Technorati Tags: bombardier, buy britain, Innovation, manufacturing, public procurement, siemens, thameslink

Recently I’ve been at the EU’s first Digital Agenda Assembly held in the Brussels’ Autoworld, surrounded by a superlative collection of cars and planes from the past century. Issues discussed included fixed/mobile superfast broadband, green IT, creative content, smart grids, cyber and many other ICT related themes. Rather than discussing about specific policies, I’d like to share some general thoughts on Europe’s ambitions and Britain’s role in technology-driven innovation.

Continental Europeans still chuckle when I say “the UK and Europe” but I’m serious. As a Southern European who has spent enough time in this country, I’ve changed from being a EU enthusiast to being pragmatically critical about this noble but thorny project. Neither cynicism nor tribalism would help here. Political realism should be the answer: too many “Europeans” still don’t grasp how hard is to keep a Union together but – fortunately or unfortunately – the UK knows better… (more…)

Technorati Tags: Digital Agenda, EU, ICT, single market

Against a backdrop of fairly mediocre growth of 0.5% highlighted in my last post, UK manufacturing is witnessing its sixth consecutive quarter of growth. However, one wonders whether the unpredicted fall in output occurred in April was due to one-off factors, or whether there is a true slowdown hitting the UK economy. The Bank of England seems to be betting on the first instance as it sets a monetary policy based on low interest rates for the rest of the year to keep the pound low and boost exports. The larger-than-expected April decline most likely reflects temporary hits to growth arising from the timing of Easter, the extra national holiday – which may have encouraged factories to pull forward their maintenance closures – and supply chain disruptions resulting from the Japanese earthquake. (more…)

Technorati Tags: electronics, growth, manufacturing

The Office of National Statistics (ONS) has recently confirmed the UK has avoided a double-dip recession with GDP increasing by 0.5% in the first quarter. GDP is estimated now to have returned to the level in the third quarter of 2010. And guess what? The largest contribution to the growth in this quarter was from manufacturing. (more…)

Technorati Tags: export, manufacturing, recession, SMEs

Japan’s most expensive disaster in its history – caused by an excruciating cocktail of earthquake, tsunami, nuclear alert and power shortages – has put global supply chains under far greater stress. Assembly firms are finding their supply chain, already affected by endemic component shortages and extended lead-times, now looking even more unpredictable.

Automotive and electronics manufacturers appear to be the hardest hit, where continued aftershocks, and now the fear of radioactive contamination, could extend supply disruptions for some time. For example, Mitsubishi Gas Chemical and Hitachi Chemical, control about 90% of the market for a specialty resin used to bond parts of microchips that go in to various devices. Both firms’ plants were damaged. Manufacturers around the world are now rushing to secure supplies of the scarcest components and materials, pushing up their prices. Numerous carmakers in Japan and North America including General Motors, Ford, Toyota and Honda have closed factories or scheduled downtime for plants, causing the loss of about 13% of worldwide car manufacturing output. (more…)

Technorati Tags: delays, disruptions, earthquake, japan, just in time, manufacturing, supply chain

Dear Jim,

Please can you fix it for me to have a growth strategy that recognises the importance of the role of technology in the UK’s economic growth? Whilst the chancellor of the exchequer has announced some supportive and welcome measures in his budget on Wednesday, I can’t help but feel it’s missed a bit of a trick here.

I’ve taken some time to think about it and now the dust has settled on what was, to be fair, a budget that was always going to be constrained in what it could deliver. However it is hard to see how emphasis can be put on ‘putting fuel into the tank of the British economy’ without attaching equal importance to the actual ‘engine’. As you well know Jim, this particular engine is the technology industry and the role it plays in underpinning every aspect of our economy, from advanced manufacturing to life sciences, creative industries to business services is all-encompassing.

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Market and industry analysts have finally done their number crunching for 2010. It’s no secret the electronics industry across Western Europe rebounded last year, with production of electronic equipment and components increasing by 6.8%, according to figures recently released. The drive for growth has been the export led recovery in Germany, particularly in the area of industrial electronics and the recovery in automobile production. On the other hand, component shortages had a negative impact on equipment growth in 2010 although the situation eased towards the end of the year. Looking forward, the industry will definitely continue to rely on the automotive, industrial, high-end communications and defence segments. Analysts are currently forecasting further growth in 2011, albeit a more modest increase of 1.6% according to some, with downside risks still very much present, particularly due to fragile consumer confidence and the impact of reduced government spending.

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Technorati Tags: electronic equipment, Electronics Manufacturing, growth, Innovation