Section A: Re-shoring - To what extent is re-shoring likely to change in the nature and scale of manufacturing in the UK?

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  • Created by: Megan
  • Created on: 14-06-15 13:25

Section A: Re-shoring - To what extent is re-shoring likely to result in a significant change in the nature and scale of manufacturing in the UK?

Advantages

  • Yes, there is likely to be a significant change because... An increased re-shoring trend to the UK would suggest that that the UK has become relatively more competitive.
  • Other offshoring locations, such as China, have recently become less competitive in terms of wages as they have seen a sharp increase.
  • Trunki has re-shored production of several designs that were previously manufactured in China.
  • An increase in re-shoring means that the decline in UK manufacturing should slow and eventually grow if the trend continues.
  • UK manufacturing scale should change and increase due to re-shoring. Growth within the UK should increase.
  • EVALUATION: Trunki is a small business and relatively insignificant to the scale and nature of manufacturing in the UK - only 15 jobs created.
  • Yes, there is likely to be a significant change because... If the UK government can address the other current issues with manufacturing in the UK, re-shoring may gain momentum.
  • Government intervention in areas such as rising energy costs or the skills gap may increase the UK's attractiveness to larger manufacturing firms.
  • UK government can encourage it through re-shoring incentives which should increase the number of firms moving manufacturing to the UK.
  • Scale of UK manufacturing should increase and the nature of manufacturing should change with there being a wider range of manufacturing in the UK.
  • EVALUATION: Government could intervene in areas that are problematic, however it may not still give an incentive for more firms to re-shore to the UK.

Disadvantages

  • No, there isn't likely to be a significant change because... re-shoring isn't showing a substantial increase in manufacturing output in the UK.
  • Off-shoring hasn't stopped and neither have places like China lost all its attractiveness as a location of off-shoring production.
  • There will always be some firms off-shoring, which means that there will always be a flow of manufacturing activities in and out of the UK.
  • Re-shoring may not increase by much over time which means it will not change the nature and scale of manufacturing in the UK because output isn't increasing.
  • EVALUATION: Re-shoring is only a recent trend and in the long run could gather more pace when other areas have been addressed.
  • No, there isn't likely to be a significant change because... other factors still are making the UK uncompetitive and unattractive for many firms to move production to the UK.
  • For example, rising energy prices is one of the key lost of competitiveness in the UK.
  • Re-shoring has been much more significant in the US where lower energy costs make the US a more competitive location.
  • Re-shoring is not likely to gain pace is the UK is still uncompetitive in areas such as rising energy prices.
  • UK manufacturing output will not increase as a result and re-shoring will not change the nature and scale of UK manufacturing.
  • EVALUATION: Many firms are still re-shoring despite rising energy costs because they may not be energy intensive industries, such as M&S who is re-shoring much of the textiles production and investing in the skills gap.

Evaluation

Re-shoring is likely to result in change in the scale and nature of UK manufacturing in the long run because if the re-shoring trend continues, it may gather pace eventually and therefore manufacturing output will increase overtime, which reduces the decline. However, it is unlikely that it will significantly change the nature and scale because the trend is still relatively small and there is still a trend of offshoring, so the scale isn't likely to increase by much in terms of manufacturing output. Therefore, it will change the scale and nature of UK manufacturing, but not significantly.

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