Section A: Aerospace - The UK must focus its manufacturing sector on high value-added industries if it is to significantly increase manufacturing's contribution to the economy. To what extent do you agree? - Advantages and disadvantages table in A Level and IB Business

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Created on: 14-06-15 18:05


	Section A: Aerospace - The UK must focus its manufacturing sector on high value-added industries if it is to significantly increase manufacturing's contribution to the economy. To what extent do you agree?
	Advantages YES, it must focus on high value-added industries because... The UK currently specialises in the development and manufacture of the most complicated and high tech parts of modern aircraft. Aerospace industry in the UK is high value-added and currently holds 17% global market share. Focusing in industries such as the Aerospace will increase the UK's manufacturing output in terms of exports. 91% of final demand coming from exports. Output is increasing and high value-added will mean the price of manufactured goods will be high. More export revenue for the UK, which will significantly contribute to the UK economy in the form of economic growth. EV: UK is currently very competitive in the Aerospace industry, but increasingly emerging economies like China are looking to build their share of these industries - potential threat? YES, it must focus on high value-added industries because... Competitiveness is the key to growth for UK manufacturing. UK's best multinational manufacturers tend to operate in sectors requiring high levels of R&D. Aerospace industry is research-intensive and is one of the sectors the government has identified as having the most opportunities - many also being high-value added. Sectors requiring high levels of R&D require constant investment and focus from the manufacturers and the government to keep the market position. Competitiveness will be improved if market position is sustained in the high value added industry. Economic growth will occur if competitiveness is strong as exports are increased. EV: Focus in these industries, such as aerospace will require long-run focus and highly skilled workers in order to maintain competitiveness - skills gap, a threat?	Disadvantages NO, it must not focus on high-value added industries because... High value-added industries may gain unwanted attention from foreign manufacturers who want to takeover. UK government has put a big emphasis on the high value-added sectors that are performing well, such as the green energy industry - attracting media attention. Focusing too narrowly on high value added will increase the risk of foreign takeovers occurring and the UK manufacturing suffering as a result - need investment in all areas. Neglect of foundation manufacturing, such as chemicals which is another identified area by the government as having the strongest opportunities. "Foundation industries" generate around 30% of UK manufacturing exports. Contribution to the UK economy in terms of manufacturing will not be increased if other areas of manufacturing become forgotten about. EV: Higher value-added products, do they generate more revenue then other industries, better in the long term?
	Evaluation The UK needs to focus on areas that they have identified as areas in manufacturing that have the strongest opportunities in the long term, such as aerospace and other high value-added industries to contribute to the economy. Focus needs to be long term by the UK government to ensure other areas are not neglected as a result and factors such as other competitors, especially emerging economies are taken into consideration. Therefore, the UK needs to focus on high-value added industries to significantly increase the contribution to the economy because these high-value added industries are some of the main industries that are performing the best and have the best future outlook for continued growth. The UK also holds a skills and specialists in these industries which makes UK manufacturing of high-value added manufactured goods competitive internationally, which is the key to the manufacturing sector of growing.

Section A: Aerospace - The UK must focus its manufacturing sector on high value-added industries if it is to significantly increase manufacturing's contribution to the economy. To what extent do you agree?

Advantages

YES, it must focus on high value-added industries because... The UK currently specialises in the development and manufacture of the most complicated and high tech parts of modern aircraft.
Aerospace industry in the UK is high value-added and currently holds 17% global market share.
Focusing in industries such as the Aerospace will increase the UK's manufacturing output in terms of exports.
91% of final demand coming from exports.
Output is increasing and high value-added will mean the price of manufactured goods will be high.
More export revenue for the UK, which will significantly contribute to the UK economy in the form of economic growth.
EV: UK is currently very competitive in the Aerospace industry, but increasingly emerging economies like China are looking to build their share of these industries - potential threat?
YES, it must focus on high value-added industries because... Competitiveness is the key to growth for UK manufacturing.
UK's best multinational manufacturers tend to operate in sectors requiring high levels of R&D.
Aerospace industry is research-intensive and is one of the sectors the government has identified as having the most opportunities - many also being high-value added.
Sectors requiring high levels of R&D require constant investment and focus from the manufacturers and the government to keep the market position.
Competitiveness will be improved if market position is sustained in the high value added industry.
Economic growth will occur if competitiveness is strong as exports are increased.
EV: Focus in these industries, such as aerospace will require long-run focus and highly skilled workers in order to maintain competitiveness - skills gap, a threat?

Disadvantages

NO, it must not focus on high-value added industries because... High value-added industries may gain unwanted attention from foreign manufacturers who want to takeover.
UK government has put a big emphasis on the high value-added sectors that are performing well, such as the green energy industry - attracting media attention.
Focusing too narrowly on high value added will increase the risk of foreign takeovers occurring and the UK manufacturing suffering as a result - need investment in all areas.
Neglect of foundation manufacturing, such as chemicals which is another identified area by the government as having the strongest opportunities.
"Foundation industries" generate around 30% of UK manufacturing exports.
Contribution to the UK economy in terms of manufacturing will not be increased if other areas of manufacturing become forgotten about.
EV: Higher value-added products, do they generate more revenue then other industries, better in the long term?

Evaluation

The UK needs to focus on areas that they have identified as areas in manufacturing that have the strongest opportunities in the long term, such as aerospace and other high value-added industries to contribute to the economy. Focus needs to be long term by the UK government to ensure other areas are not neglected as a result and factors such as other competitors, especially emerging economies are taken into consideration. Therefore, the UK needs to focus on high-value added industries to significantly increase the contribution to the economy because these high-value added industries are some of the main industries that are performing the best and have the best future outlook for continued growth. The UK also holds a skills and specialists in these industries which makes UK manufacturing of high-value added manufactured goods competitive internationally, which is the key to the manufacturing sector of growing.

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Section A: Aerospace - The UK must focus its manufacturing sector on high value-added industries if it is to significantly increase manufacturing's contribution to the economy. To what extent do you agree?