In a very timely manner, Julia Banner's current exhibition at Tate Britain highlights the danger of UK's engineering sector plunging to earth; in an age of hyper competition from supposedly 'advanced' and nominally 'emerging' nations.
In a prosaic metaphor she hangs a de-commissioned Harrier Jump Jet from the ceiling, its nose centimetres from the floor, whilst in an adjoining space, a paint-stripped and mirror polished Jaguar Fighter lays belly-up on the floor, as if downed fowl - resting on canopy, wing-tip and tail.
The best of art has always been a pertinent comment of the era, and whilst an overly obvious metaphor for the eyes of more profound minds, it is undoubtedly a powerful juxtaposition, citing the UK's industrial fragility within the backdrop of a building literally built from Tate & Lyle's proceeds of trade and industrial might of the Victorian era.
The innate message is clear to the masses
In sync comes (ex-BP) Lord Brown's call - as President of the Royal Society of Engineers - to the Department for Business, Innovation & Skills.
A call for a National Science Review that looks at the necessary measures required to re-balance the £4 billion per annum public expenditure, his assertion that the current funding ratio between far horizon 'Applied' versus near-horizon 'Pure' must be altered.
This call has been lambasted as short-sighted and reactionary by certain quarters of the financial press, and rebuked by Lord Rees - President of the Royal Society: known for its 'blue-sky' thinking; (where Lord Brown is also a Fellow). * Please see Post Script.
But Lord Brown is absolutely correct in this assertion....realistically "there is no alternative"...and realism must at this time prevail over esoteric ambitions.
Given not only the state of the nation's fiscal woes, but that of its relatively declined knowledge and advanced capabilities base in the face of fast-track BRIC+ nations.
PM Cameron's (ostensibly trade) visit to India highlighted that such nations can now licence and build UK designed aero-structures, as seen with Hindustan Aero's deal to construct India's own Hawks to BAE specifications. The (admittedly high-value) avionics and engine packages have still been sold direct from the UK by BAE Systems and Rolls-Royce, providing £500m & £200m programmes respectively. Whilst in the private aircraft realm we see only this month the launch of Brazil's Embraer small jet plane, and of course in China ambitions to match Boeing and Airbus in the mid and large commercial plane segment.
So the progress made by what were once seen as automatic – indeed desperate - recipients of UK aero-tech, highlights the changed world the west must now address in its own industrial policy-making.
Under greater pressure still is the UK Auto-sector, given its lower order technological demands. In a similar call to Parliament's Automotive Industry Reception, Ron Dennis (Chairman of McLaren) requested additional government assistance, his solution comprising of:
1. Education: additional effort to attract would be students to STEM subjects (Science, Technology, Engineering & Maths)
(plus extra curricula activities such as the Formula Student 600cc race car competition)
2. New Tax breaks for R&D efforts
3. The idea of 'collective achievement'
4. Cultural change in schools toward 'courageous experimentation', not 'fear'
Now this 4-point plan may be simplistic, arguably far too lightweight (in its current presented guise) to be taken seriously as a 'Vision for Britain' but it highlights some of the basic elements that are undoubtedly required. In his own words, it is not "rocket science".
[NB With all due respect, although Dennis partially decries the student shift to the 'social sciences' (media etc etc), the reality is that ultimately a marriage of STEM subjects and the Arts is required, with moreover an injection of a 3rd disciplinary mentality: namely Business & Finance methods and processes.
At the educational level investment-auto-motives whole-heartedly believes that "Renaissance (wo)Man" needs to be re-born in the UK to propel the capability of its knowledge-base. This has always the central philosophy of Turan Ahmed's and a central USP of investment-auto-motives].
However, ultimately the discussion of exactly how the UK progresses to generate future industrial value-creation is at long last being tabled.
It may be seen by some purveyors of the more esoteric sciences that it all smacks of picking winners and losers. Such a blinkered approach undoubtedly will not prevail, whilst positively a better and stronger value chain can be created between (public & private) investment, academia and industry.
To sum-up, in a reversal use of the overtly coarse phrase "its all about the economy, stupid!"
At present such truisms presented so harshly are desperately required.
Post Script*
One presentation at the London School of Economics last year was given by a New York University lecturer, the supposed contributing originator and part-backer of (to quote) a "Chug Chug" machine - that had supposedly gained Royal Society interests.
Supposedly designed to extract CO2 directly from the atmosphere (presumably in a tree-like manner, as opposed to Carbon Capture & Storage of power-stations**), no explanation of the machine's mechanicals were presented even at theoretical level. The young yet 'savvy' student audience saw the proposition as advanced as ludicrous.
It did the Royal Society no favours either, potentially seen by the LSE audience as a 'crack-pot' body, which is far from the truth given its illustrious origins and members. However such presentations only serve to assist the cultural chasm between science and economics – the very last thing needed.
PPS**
The issue of CCS is presently being discussed by the House of Lords
Showing posts with label UK automotive industrial policy. Show all posts
Showing posts with label UK automotive industrial policy. Show all posts
Monday, 2 August 2010
Tuesday, 9 March 2010
PESTEL Trends – The Western Economic Model – Regenerating Tangible Added Value...Part 3
The aforementioned 'call to action' for the creation of a new industrial template – with auto playing an important role - of course presents major challenges to any successive governments seeking to re-balance the UK's wealth generation model (ie Industry vs Service vs Finance sectors)
Undeniably there has been a gradual change in the structure of British economy over the last 40 years, as heavy industry has migrated to more suitable regions, the service sector has flourished and perhaps most apparent to government the massive growth of the Financial Services sector due to national and international growth.
That is an inevitable consequence of general wealth generation domestically and the fact that London defends its predominant position as a destination of choice amongst global capital markets - often the exchange of choice for new and secondary IPOs.
With the personal rewards on offer in the City versus comparatively poor rewards in other realms, unsurprisingly the sector has also attracted the best and brightest from graduate level to later year 'career shifters' and been a major influence regards dedicated new entrepreneurial activity – indeed it was this fact that set the context for the bridging the 'intelligence chasm' between industry, investors and government that drove the creation of investment-auto-motives.
Even with progressive competition from New York, Hong Kong and Beijing, London today still sits at the commercial epicentre of global commercial affairs, as depicted by the FTSE 100 / 250. Its age-old, proven track-record, plethora of multi-sector prime operators and support players, aswell as a balance of self-control relative to 'light-touch' regulation elevates the City as perhaps the most responsible yet progressive of financial hubs.
To that end, unsurprisingly the Top (FTSE) 20 highlight the importance of financial intermediaries along with other mature sector household names:
Financials - Banking, Insurance, Pensions (HSBC, Barclays, Standard Chartered, RBS, Lloyds),
Energy - Oil (BP, Shell) Gas (BG Group),
Telco - (Vodafone),
Pharma - (GSK, AstraZenica),
Mining - (BHP Billitonn, Rio Tinto, Xstrata, Anglo-American),
Tobacco - (BAT),
Consumer - (Tesco, Diagio, SABMiller, Unilever)
Given the need to essentially transform the UK's (and in due course Western Europe's) economic model, of these corporations, only Vodafone can be regarded as a late 20th century commercially transformative 'disrupter'. A new entrant 'sector transformer' in the typical sense whose characteristics are seen to be akin to any successful eco-tech venture in the near to mid-term. Hence the Telco business model via Vodaphone and peers is as close a pseudo-industrial equivalent to the successful dotcom companies that are taken as a benchmark for high-potential 'eco-tech'.
But it must be noted that Vodafone was always in reality heavily biased to its service content, the reality of its true industrial base always intended to be light – the erection of a 'simple' low cost mast network, the use of (bought-in) proprietary handsets, as an on-seller of reputed branded handsets, with focus on service package provision (B2B & B2C). Moreover, the firm's true growth came not organically, but from national and international 'bolt-on' acquisitions, M&A and partnerships.
Thus, to use Vodafone as a directly applicable model for 'eco-tech' (especially regards the auto-industry) maybe somewhat naïve, even if well intended. There are undoubtedly 'lessons to be learnt as has been the case in the push for a modelled auto-industry (from INDEGO to Better Place to GM's appointment of ex-AT&T Whitacre), yet as a the UK's prime reference, case-study enterprise, its 'reflection' may ultimately be less useful than than often espoused by the sector-transformative rhetoric heard. When seeking to re-create an entrenched industry, it is finite, applicable detail that is required, not broad, hypothetical generalities.
Thus it may be 'only' within the 'FTSE 30 & 40' that we start to see the placings of other auto-relevant sectors, in the guise of traditional Engineering & Energy companies which through phases of consolidation and scientific improvement, have climbed the 'value-ladder' in respectively specialist application fields, or by re-packaging their commodity offerings.
#23 Energy (National Grid)
#25 Energy (Centrica)
#27 Aerospace & Defence (BAE Systems)
#29 Energy (Scottish & Southern)
#34 Aerospace (Rolls Royce Aero)
[NB the UK's eponymous GKN fell out of the FTSE100 in 2004].
Given that the eco-tech realm must be (hardware and software) engineered, some may see it as a concern to see that the only few big UK Engineering companies sit in the 'late 20s', compared with say Germany's crop in the DAX30 (inc VW, Daimler, BMW, MAN, Continental, Siemens, Thyssen-Krupp), or the ranking of France's CAC40 constituents (inc PSA, Renault, Michelin).
Of course, given that London is such a large financial global hub the FTSE intrinsically holds a greater number of international companies with larger rated MarketCaps, so the rankings of the UK's finest would be expectantly lower. Yet still a counter-viewpoint will argue that the EU inter-national difference between the UK and the Continent (ie national 'deference') to the automotive sector is plain to see. And it is that productivity difference that will have a very large impact in this 'post-apocalyptic' economic world in creating economic growth. In effect, the UK presently has all to play for.
The argument runs that given the importance & poignancy of personal mobility - and the entrenched 'added value' therein - since the fall-away of GKN from the FTSE100 in 2004, the remaining core of the UK's automotive industry is now ever more distant from investor attention; especially 'deep-capital' institutional attention.
Today in the UK it is the more visible Trade section of the auto-industry that automatically draws investor attention; ranging from Inchcape, Lookers and Pendragon to Halfords. Their upstream counterparts in supplier and development realms - such as Smiths Group (having acquired TI Group) and Tomkins - perhaps loosing profile since peers (such as Lucas, TRW etc) were absorbed into foreign ownership and their ostensibly 'low-mid-tech' products are seen as lacking competitive edge; hence investor interest..
Beyond the obvious FTSE listings, there are many more that have a theoretical influence and bearing upon the future of UK Autos and 'eco-tech; in general. The FTSE-techMARK100 is directed at high-tech' and innovative companies, whilst latterly the creation of various 'Responsible Investment Indices' track the performance of those that meet CSR-based criteria, but invariably drags as a consequence of failed Kyoto & Copenhagen. Indeed, the ability to demonstrate a truly tenable 'eco-index'; and may not appear until the ideals and realities of carbon-credit trading market becomes a stable, credible entity; this still looks some time away.
Instead as a proxy, the FTSE-techMARK100 is typically used as the viewing-pool when assessing eco-relative progress: technical breakthroughs, feasible R&D spin-offs (incubators & VC backing) with possible emergence of B2B & B2C products. Presently, commercial entities in the techMARK100 with material relevance to automotive include: Cobham (inc Frazer-Nash Research), QinetiQ, Aveva and Ultra Electronics.
This focus on publicly listed companies obviously overlooks privately owned entities. Taken from The Times' 'Top Track 100', such influencers include:
R&D and Assembly Base - Caparo Group (inc Caparo Vehicle Technologies), JCB
Development - Arup Engineering.
Supply Base - TI Automotive, Unipart Group, Marshall Group, Doncasters Group,
Retail/Trade Base - Arnold Clarke, Greenhous Group, JCT600 Group, Listers Group
Aftermarket Base – Kwik-Fit
In addition beyond these relatively 'large Cap' companies, the UK possibly has the world's most extensive network of Niche Producer / Assemblers; from the renowned few (eg McLaren, Noble (Fenix), Marcos, Ginetta, Westfield and of course Morgan) to the myriad of little known plentiful Kit Car firms, often family owned, or part of a small synergistic conglomerate.
[NB Aston Martin Lagonda & Lotus are not shown given their comparitive sizable 'mid-scale' volumes. Also note that AML operates what is notionally known as a craft-shop for limited edition and personalised models - using non-standard leathers, veneers, paints etc; but in reality essential skills-base is semi-skilled as is necessary
to add the required dimension of cosmetic difference. (The definition of craft-talent here is in the William Morris vein of the singular constructor/adapter, yet with a pro-free-market individualist stance, instead of Morris' more socialist view)].
Unfortunately there often exists a level of distrust and friction between the small operators and the investment community. The past has witnessed internal strategic power struggles as investors naturally seek to maximise their returns via financial leverage, asset divestment or alternative exit strategies, going against the grain of originator's intent. Equally history shows how niche car companies have been created or re-directed as little more than emotion-led capital attraction schemes, little business development and brand building resulting after dissappearance of the original 'club' set-up capital.
Thus, note that for many small companies the Morgan Motor Co. business model seen as a template of self-sustainability. And whilst the UK's aim is obviously to progress a high-value, intelligence intensive R&D auto-realm, the re-creation a modern-day crafts-based labour force at the 'micro' level – as Morgan does – plays a role in manufacturing high-value tailor-made products].
And of course, pertaining to certain sections the core product's value chain, or circumnavigating the whole, is the world of auto-industry strategic and operational consulting.
Unlike the previous John Harvey-Jones' recommendation for Morgan to modernise its production methods – though acute in parts – investment-auto-motives has longed believed that 'Morgan Way' has facets of merit that can influence the future of specialist UK auto-manufacture.
But to re-quote Sir John on one perceptive matter... “if we imagine the UK can get by with a bunch of people in smocks showing tourists around medieval castles, we are quite frankly out of our tiny minds”.
Thus though the UK is notionally 'post-industrial' with only 14% of GDP generated by manufacturing, it undeniably has a broad span of capabilities, each link of that value-chain varying in 'strength & connectedness' given historical events.
But of course labels abound, and just as we are 'post-industrial', so there is a sense that we are 'post-advertising' given its declining influence, and even 'post-marketing' given the growing trend to avoid consumer tracking. Ultimately semantics are of little use, what matters is an understanding of how the UK must be strategically positioned relative to other countries, and how its core competencies must be evolved and re-shaped.
As demonstrated by the FTSE100, in recent decades the UK's value-creation base has been largely led by financial, energy, media, telco and retail sectors. As with other M&As, the sale of Cadbury to Kraft only serves to show how the basic mass-consumer industries that formerly build the UK's economy are today better served from other countries or by foreign owners in the search for scale efficiencies and global marketing reach - it's the natural evolution of the globalised capital markets which the UK itself benefited by.
Yet the UK chocolate industry, like its brewing cousin, is far from dead, with a new crop of higher value 'chocolatiers' and micro-brewers reinvigorating their respective sectors...a poignient philosophical lessons for UK Autos plc.
Ultimately, it will require a synthesis of the following issues and more within a coherent policy format to achieve the required transformation of the indigenous UK sector.
Philosophical
- Recognition of the full span/reach of the auto-sector across the broad value-chain
- Parallel learning, case-study lessons (eg Vodaphone plus others) for each sub-sector of that chain.
- Development of pathways for improved scientific & technical cross-fertilisation
- Creation of 'white space' for cross-sector product experimentation
- Far greater government oversight of publicly funded 'eco-tech' ventures
Commercial IPR Leverage
- Applied 'in the bag' R&D from other non-auto indirect sectors & vanguards (eg BAE to Dyson)
- Applied product development methodologies (philosophical & operational) from BIC within the auto-sector and from elsewhere
- Applied process and materials 'technology-transfer'
Industry Structure
- Greater interaction between domestic industry and foreign 'transplant' tech & IPR capabilities.
- Greater interaction between domestic industry and other sectors
(eg motorcycles, light aircraft, private marine)
- Creation of a central 'knowledge-bank' re: companies' competence, resource & IPR
- Connectivity enabled by use of centralised IT database and progressive intel-mgmt
- Connectivity aim to enhance robustness of sector
(ie stretching from NPD exploration via more Joint Ventures to 'dormant' asset/plant lease-lend)
Legislative Regulation
- Regulatory change in roadway definition & use
- Regulatory change in vehicle definition & use
Consumer Orientation
- Consumer attitudinal change towards 'eco' from “worthy” to “aspirational”
- Consumer attitudinal change regards the very idea of 'the car' and its DNA
Educational
- Re-examination of Education's remit in creating the creative commercial minds of tomorrow.
- Greater connectivity of education and commerce with vitally necessary cross-disciplinary learning
(eg the sciences mixed with the arts mixed with business)
- Far greater focus on automotive industry history, practice and methods:
(Cardiff Business School – Brunel Univ. - Imperial Univ. - Coventry Univ - RCA cross-pollination)
[NB plus much more].
This to be achieved via utilisation of the home-grown, indigenous high-value Automotive Consulting base, constituents of which ably demonstrate themselves as world-class - an enabler for our own island, and that island's influence over the globe.
Undeniably there has been a gradual change in the structure of British economy over the last 40 years, as heavy industry has migrated to more suitable regions, the service sector has flourished and perhaps most apparent to government the massive growth of the Financial Services sector due to national and international growth.
That is an inevitable consequence of general wealth generation domestically and the fact that London defends its predominant position as a destination of choice amongst global capital markets - often the exchange of choice for new and secondary IPOs.
With the personal rewards on offer in the City versus comparatively poor rewards in other realms, unsurprisingly the sector has also attracted the best and brightest from graduate level to later year 'career shifters' and been a major influence regards dedicated new entrepreneurial activity – indeed it was this fact that set the context for the bridging the 'intelligence chasm' between industry, investors and government that drove the creation of investment-auto-motives.
Even with progressive competition from New York, Hong Kong and Beijing, London today still sits at the commercial epicentre of global commercial affairs, as depicted by the FTSE 100 / 250. Its age-old, proven track-record, plethora of multi-sector prime operators and support players, aswell as a balance of self-control relative to 'light-touch' regulation elevates the City as perhaps the most responsible yet progressive of financial hubs.
To that end, unsurprisingly the Top (FTSE) 20 highlight the importance of financial intermediaries along with other mature sector household names:
Financials - Banking, Insurance, Pensions (HSBC, Barclays, Standard Chartered, RBS, Lloyds),
Energy - Oil (BP, Shell) Gas (BG Group),
Telco - (Vodafone),
Pharma - (GSK, AstraZenica),
Mining - (BHP Billitonn, Rio Tinto, Xstrata, Anglo-American),
Tobacco - (BAT),
Consumer - (Tesco, Diagio, SABMiller, Unilever)
Given the need to essentially transform the UK's (and in due course Western Europe's) economic model, of these corporations, only Vodafone can be regarded as a late 20th century commercially transformative 'disrupter'. A new entrant 'sector transformer' in the typical sense whose characteristics are seen to be akin to any successful eco-tech venture in the near to mid-term. Hence the Telco business model via Vodaphone and peers is as close a pseudo-industrial equivalent to the successful dotcom companies that are taken as a benchmark for high-potential 'eco-tech'.
But it must be noted that Vodafone was always in reality heavily biased to its service content, the reality of its true industrial base always intended to be light – the erection of a 'simple' low cost mast network, the use of (bought-in) proprietary handsets, as an on-seller of reputed branded handsets, with focus on service package provision (B2B & B2C). Moreover, the firm's true growth came not organically, but from national and international 'bolt-on' acquisitions, M&A and partnerships.
Thus, to use Vodafone as a directly applicable model for 'eco-tech' (especially regards the auto-industry) maybe somewhat naïve, even if well intended. There are undoubtedly 'lessons to be learnt as has been the case in the push for a modelled auto-industry (from INDEGO to Better Place to GM's appointment of ex-AT&T Whitacre), yet as a the UK's prime reference, case-study enterprise, its 'reflection' may ultimately be less useful than than often espoused by the sector-transformative rhetoric heard. When seeking to re-create an entrenched industry, it is finite, applicable detail that is required, not broad, hypothetical generalities.
Thus it may be 'only' within the 'FTSE 30 & 40' that we start to see the placings of other auto-relevant sectors, in the guise of traditional Engineering & Energy companies which through phases of consolidation and scientific improvement, have climbed the 'value-ladder' in respectively specialist application fields, or by re-packaging their commodity offerings.
#23 Energy (National Grid)
#25 Energy (Centrica)
#27 Aerospace & Defence (BAE Systems)
#29 Energy (Scottish & Southern)
#34 Aerospace (Rolls Royce Aero)
[NB the UK's eponymous GKN fell out of the FTSE100 in 2004].
Given that the eco-tech realm must be (hardware and software) engineered, some may see it as a concern to see that the only few big UK Engineering companies sit in the 'late 20s', compared with say Germany's crop in the DAX30 (inc VW, Daimler, BMW, MAN, Continental, Siemens, Thyssen-Krupp), or the ranking of France's CAC40 constituents (inc PSA, Renault, Michelin).
Of course, given that London is such a large financial global hub the FTSE intrinsically holds a greater number of international companies with larger rated MarketCaps, so the rankings of the UK's finest would be expectantly lower. Yet still a counter-viewpoint will argue that the EU inter-national difference between the UK and the Continent (ie national 'deference') to the automotive sector is plain to see. And it is that productivity difference that will have a very large impact in this 'post-apocalyptic' economic world in creating economic growth. In effect, the UK presently has all to play for.
The argument runs that given the importance & poignancy of personal mobility - and the entrenched 'added value' therein - since the fall-away of GKN from the FTSE100 in 2004, the remaining core of the UK's automotive industry is now ever more distant from investor attention; especially 'deep-capital' institutional attention.
Today in the UK it is the more visible Trade section of the auto-industry that automatically draws investor attention; ranging from Inchcape, Lookers and Pendragon to Halfords. Their upstream counterparts in supplier and development realms - such as Smiths Group (having acquired TI Group) and Tomkins - perhaps loosing profile since peers (such as Lucas, TRW etc) were absorbed into foreign ownership and their ostensibly 'low-mid-tech' products are seen as lacking competitive edge; hence investor interest..
Beyond the obvious FTSE listings, there are many more that have a theoretical influence and bearing upon the future of UK Autos and 'eco-tech; in general. The FTSE-techMARK100 is directed at high-tech' and innovative companies, whilst latterly the creation of various 'Responsible Investment Indices' track the performance of those that meet CSR-based criteria, but invariably drags as a consequence of failed Kyoto & Copenhagen. Indeed, the ability to demonstrate a truly tenable 'eco-index'; and may not appear until the ideals and realities of carbon-credit trading market becomes a stable, credible entity; this still looks some time away.
Instead as a proxy, the FTSE-techMARK100 is typically used as the viewing-pool when assessing eco-relative progress: technical breakthroughs, feasible R&D spin-offs (incubators & VC backing) with possible emergence of B2B & B2C products. Presently, commercial entities in the techMARK100 with material relevance to automotive include: Cobham (inc Frazer-Nash Research), QinetiQ, Aveva and Ultra Electronics.
This focus on publicly listed companies obviously overlooks privately owned entities. Taken from The Times' 'Top Track 100', such influencers include:
R&D and Assembly Base - Caparo Group (inc Caparo Vehicle Technologies), JCB
Development - Arup Engineering.
Supply Base - TI Automotive, Unipart Group, Marshall Group, Doncasters Group,
Retail/Trade Base - Arnold Clarke, Greenhous Group, JCT600 Group, Listers Group
Aftermarket Base – Kwik-Fit
In addition beyond these relatively 'large Cap' companies, the UK possibly has the world's most extensive network of Niche Producer / Assemblers; from the renowned few (eg McLaren, Noble (Fenix), Marcos, Ginetta, Westfield and of course Morgan) to the myriad of little known plentiful Kit Car firms, often family owned, or part of a small synergistic conglomerate.
[NB Aston Martin Lagonda & Lotus are not shown given their comparitive sizable 'mid-scale' volumes. Also note that AML operates what is notionally known as a craft-shop for limited edition and personalised models - using non-standard leathers, veneers, paints etc; but in reality essential skills-base is semi-skilled as is necessary
to add the required dimension of cosmetic difference. (The definition of craft-talent here is in the William Morris vein of the singular constructor/adapter, yet with a pro-free-market individualist stance, instead of Morris' more socialist view)].
Unfortunately there often exists a level of distrust and friction between the small operators and the investment community. The past has witnessed internal strategic power struggles as investors naturally seek to maximise their returns via financial leverage, asset divestment or alternative exit strategies, going against the grain of originator's intent. Equally history shows how niche car companies have been created or re-directed as little more than emotion-led capital attraction schemes, little business development and brand building resulting after dissappearance of the original 'club' set-up capital.
Thus, note that for many small companies the Morgan Motor Co. business model seen as a template of self-sustainability. And whilst the UK's aim is obviously to progress a high-value, intelligence intensive R&D auto-realm, the re-creation a modern-day crafts-based labour force at the 'micro' level – as Morgan does – plays a role in manufacturing high-value tailor-made products].
And of course, pertaining to certain sections the core product's value chain, or circumnavigating the whole, is the world of auto-industry strategic and operational consulting.
Unlike the previous John Harvey-Jones' recommendation for Morgan to modernise its production methods – though acute in parts – investment-auto-motives has longed believed that 'Morgan Way' has facets of merit that can influence the future of specialist UK auto-manufacture.
But to re-quote Sir John on one perceptive matter... “if we imagine the UK can get by with a bunch of people in smocks showing tourists around medieval castles, we are quite frankly out of our tiny minds”.
Thus though the UK is notionally 'post-industrial' with only 14% of GDP generated by manufacturing, it undeniably has a broad span of capabilities, each link of that value-chain varying in 'strength & connectedness' given historical events.
But of course labels abound, and just as we are 'post-industrial', so there is a sense that we are 'post-advertising' given its declining influence, and even 'post-marketing' given the growing trend to avoid consumer tracking. Ultimately semantics are of little use, what matters is an understanding of how the UK must be strategically positioned relative to other countries, and how its core competencies must be evolved and re-shaped.
As demonstrated by the FTSE100, in recent decades the UK's value-creation base has been largely led by financial, energy, media, telco and retail sectors. As with other M&As, the sale of Cadbury to Kraft only serves to show how the basic mass-consumer industries that formerly build the UK's economy are today better served from other countries or by foreign owners in the search for scale efficiencies and global marketing reach - it's the natural evolution of the globalised capital markets which the UK itself benefited by.
Yet the UK chocolate industry, like its brewing cousin, is far from dead, with a new crop of higher value 'chocolatiers' and micro-brewers reinvigorating their respective sectors...a poignient philosophical lessons for UK Autos plc.
Ultimately, it will require a synthesis of the following issues and more within a coherent policy format to achieve the required transformation of the indigenous UK sector.
Philosophical
- Recognition of the full span/reach of the auto-sector across the broad value-chain
- Parallel learning, case-study lessons (eg Vodaphone plus others) for each sub-sector of that chain.
- Development of pathways for improved scientific & technical cross-fertilisation
- Creation of 'white space' for cross-sector product experimentation
- Far greater government oversight of publicly funded 'eco-tech' ventures
Commercial IPR Leverage
- Applied 'in the bag' R&D from other non-auto indirect sectors & vanguards (eg BAE to Dyson)
- Applied product development methodologies (philosophical & operational) from BIC within the auto-sector and from elsewhere
- Applied process and materials 'technology-transfer'
Industry Structure
- Greater interaction between domestic industry and foreign 'transplant' tech & IPR capabilities.
- Greater interaction between domestic industry and other sectors
(eg motorcycles, light aircraft, private marine)
- Creation of a central 'knowledge-bank' re: companies' competence, resource & IPR
- Connectivity enabled by use of centralised IT database and progressive intel-mgmt
- Connectivity aim to enhance robustness of sector
(ie stretching from NPD exploration via more Joint Ventures to 'dormant' asset/plant lease-lend)
Legislative Regulation
- Regulatory change in roadway definition & use
- Regulatory change in vehicle definition & use
Consumer Orientation
- Consumer attitudinal change towards 'eco' from “worthy” to “aspirational”
- Consumer attitudinal change regards the very idea of 'the car' and its DNA
Educational
- Re-examination of Education's remit in creating the creative commercial minds of tomorrow.
- Greater connectivity of education and commerce with vitally necessary cross-disciplinary learning
(eg the sciences mixed with the arts mixed with business)
- Far greater focus on automotive industry history, practice and methods:
(Cardiff Business School – Brunel Univ. - Imperial Univ. - Coventry Univ - RCA cross-pollination)
[NB plus much more].
This to be achieved via utilisation of the home-grown, indigenous high-value Automotive Consulting base, constituents of which ably demonstrate themselves as world-class - an enabler for our own island, and that island's influence over the globe.
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