The Changing Geographies of Manufacturing in the UK since the 1970s

Since the 1970's, the geographies of manufacturing in the UK has been one of steady decline in relative contribution to GDP and in relative and real terms of employment. This dominant trend can be explained by 4 Theses and this essay will focus on them.

The Maturity thesis focuses on the decline in the relative contribution of manufacturing to the employment in the UK.
A typical Industry is going through:

1. Growth Phase, in which the industry share in the country's employment rises rapidly.

2. Maturity Phase, when the share stabilises.

3. Declining Phase, marked by decline in this share.

Figure 1 Employment change through maturity

A sector in growth phase takes the labour needed for its growth from other sectors. The service sector was experiencing growth from the 1970’s onwards and in immature countries the labour was mostly taken from the agricultural sector. But the UK had just 3,6 % of civil employment in agriculture in 1966.(Martin and Rowthorn 1986, 2010) The consequence was that almost all of the labour needed for its growth (20%) from 1971 until 2009 was taken from the industry sector.
This explains why the UK was the first developed country to experience de-industrialisation and its strong influence.

Figure 2 UK Unemployment by broad sector, 1971-2009 Cambridge Econometrics analysis of ONS (2013)

But most of the rise in employment in the service sector was experienced by the South East, especially London. While the losses in Manufacturing jobs were just a little bit bigger for the South East then for the rest of the country. By 2007 the South East had 40 per cent of all business service and 35 per cent of all financial service jobs in the UK, whilst being responsible for 50 per cent of the growth in both sectors between 1997 and 2007. (Coe and Jones 2010)
So, while the South East was becoming less dependent on manufacturing and was experiencing growth in the service sector, the north, Wales and the Midlands, had no growth in services and therefore remain dependent on the declining manufacturing sector and government jobs.

The trade specialisation theory argues that countries are specialising in certain goods and then trading with them on the international market. The UK experienced deficits in its trade balance after the Second World War due to reduced income from its manufacturing exports and the rising costs of raw materials and food, which are traditionally imported by the UK. Since it had limited ability to borrow, it had to raise manufacturing outputs to have a non-negative trade balance. Because of exports of North Sea oil, lower costs of food imports and rising value of service exports, the non-manufacturing sector started to generate surplus in the 1980’s. Manufacturing export value was therefore declining because it didn't have to produce surpluses any more and started importing. (Martin and Rowthorn 1986)

Figure 3 Components of the UK Balance of Payments (Rowthorn and Coutts 2013)

The failure thesis argues that the economic record has been poor, because of the weak performance of the manufacturing industry. It argues that due to the spill-over effect of manufacturing, the employment in the whole industry would have risen with a stronger manufacturing sector.
The performance of the manufacturing sector has been poor compared to the major OECD Countries, especially since the oil crisis in 1973 and when the Thatcher government took office in 1979. But the output of manufacturing is rising since the 1980s and is at least as great as in the 1960 and this can't be considered as a failure. The fall in employment in manufacturing is rather explained by the movement to high-skilled and low labour-intensive production. (Fothergill and Gore 2013)

Figure 4 Real Output and Total Employment in UK Manufacturing, 1978-2010

Office of National statistics(2013)

The disinvestment thesis argues that neoliberal political economy is responsible for the decline. In the mid-1970s the political economy was changing from a social democratic to a neoliberal one, influenced by the Thatcher government. The Government removed capital export controls and allowed nationalised industries to source from abroad, such that their markets opened to international competition.
This led to losses of hundreds of thousands jobs in private sectors and a similar number in the nationalised industries by the early 1980s. By 2009 almost all of the 400.000 plus jobs that existed in heavy industries in North-east England had disappeared. (Mohan 1999)
Manufacturing companies were outperformed by competition from social market economies, such as Germany or France, which were still protected by their governments.

Figure 5 Share of manufacturing in total employment, G7 countries, 1970-2013

Source: OECD(2013)

The financial Crisis in 2008 hit the UK very hard. The first reason is that the City of London is traditionally trading very actively on the international markets, which brought the crisis to the UK very quickly. The second is that UK markets were highly unregulated and unprotected due to the neoliberal political economy.
Many governments adopted a contractionary fiscal policy in order to finance the huge bailout of the banks. This led to lower aggregate demand in the entire world, the real economy suffered and so did the manufacturing sector. The north of the Country was hit harder by the recession again, because it was more reliant on government and manufacturing jobs. (Martin 2012) The 2008 Crisis is one of 3 major recessionary shocks in the Economy of the UK since the Oil Crisis in 1973. The others were in 1979 and 1990. UK regions reacted differently to these, which shows the resilience of the economy from the regional and national perspective. (Martin 2012)

Figure 6 North East and South East growth trends compared

(Martin 2012)

While the South East was hit with same strength, or stronger as the North East, North West, Scotland and Wales by the recessions, it recovered with much higher pace.
The higher diversity in the economy and the fact that the majority of the country's higher education institutions are in the South East together with the higher availability of foreign capital are key drivers of better resilience in that region. (Martin 2012)

Another change which occurred in the manufacturing sector is the shift of companies from urban to rural sites. The reasons are the lower costs of employment and capital needed, due to lower competition for both inputs compared to urban areas.
The rural sites allow more flexibility for start-up and small, high-technology companies, because plants and employment can be extended more easily. (Martin and Rowthorn 1986)

The raw employment figures may over-state the decline of UK manufacturing.
In the 1960s, large manufacturing companies could be highly self-contained businesses. The increase in ‘out-sourcing’, led to a transfer of jobs from ‘manufacturing’ to the service sector, which also explains the huge expansion of employment in ‘business services’. (Fothergill and Gore 2013)
But the decline is still huge. However, the recent trend of on-shoring of manufacturing shows that it is possible to compete on quality, delivery speed, customisation and even price with producers located in lower-cost locations, what is important for the future development of manufacturing in the UK.

How was academic geography integral to, and influenced by, the establishment and maintenance of the British Empire?

In the late 15th century European countries were competing to find an all-water route to Asia. The motive for this process was the opportunity for trade, European goods could be exchanged for raw materials in much better exchange rates than in Europe. Since the land routes were insecure and very time consuming, the water route was seen as an useful alternative.(Painter, Jeffrey et al. 2009)
Cartography and navigational technology were crucial in this attempt.
The Portuguese, with Vasco de Gama were the first to circumnavigate the African continent and reach India in 1948, while the Spanish fleet, led by Christopher Columbus was the first to reach America in 1492. (Painter, Jeffrey et al. 2009)
This was the beginning of the Spanish and Portuguese empires. While Portugal was focusing on trade and was made up of many tiny possessions, Spain was spreading in south and middle America and stealing gold and silver from the natives. Both countries gained significant wealth from these operations.
In the second half of the sixteenth century Britain, France and the Netherlands closed the gap in the knowledge of cartography and were on their way to build their own empires. (Painter, Jeffrey et al. 2009)

Imperialism and colonialism are practices that were common for empires.
Colonialism is described by Michael Watts as “the establishment and maintenance of rule, for an extended period of time, by a sovereign power over a subordinate and alien people, that is separate from the ruling power” (2000:93)
Imperialism relates to the practice of enacting power over a particular group of people or territory. Empires can therefore be defined as an unequal territorial relationship between states often based on economic exploitation. (Nayak and Jeffrey 2011)
The British Empire was established in the Caribbean and North America in the 17th century. England's superior naval power and geographical knowledge were the reasons for their supremacy on such big territories as well as in the Indian sub-continent, where Portugal, France and a strong local empire were overpowered. (Nayak and Jeffrey 2011)
In the late 18th century two thirds of the sub-continent were under the control of the Empire.
Australia was used as a penal colony from its discovery in 1801, until gold was found 50 years later. After 1851 many emigrants settled there and it became a large exporter of agricultural products together with New Zealand. Increasing demand for raw materials and advances in explorations led to the division of Africa between the European countries in the late 19th century. The British Empire had also colonies there. (Painter, Jeffrey et al. 2009)
Although the present day United States of America were lost in 1782, Canada was gained from France in 1763. The territories of the British Empire covered a quarter of the world's land surface at the end of 19th century. (Nayak and Jeffrey 2011)

In order to control such a huge territory and acquire new ones, the British Empire needed knowledge in many areas like ship-building, construction, cartography and navigation. The consequence was that British universities began teaching academic geography between the 16th and 19th century. (Nayak and Jeffrey 2011)
Like geographical knowledge reinforced the British Empire, it was also dependent on its rise, since it produced mass of information relevant for geography.

This is described as “mapping and naming”.
European countries sought to produce precise maps of the world, to describe the natural environment of different places and their inhabitants in order to control them better.
Those places were than named in familiar terms, mostly in their own language. This was yet another form of possession. (Painter, Jeffrey et al. 2009)

The impact of climate on certain regions was thought to be highly significant and to condition agricultural production, as well as the ways of life and people's biological make-up. It was considered that the human species consisted of different groups such as Caucasian, Negro, Asiatic and so on. They were all believed to have different physical, mental and emotional characteristics. Africans were even considered as a separate species by some writers. It was either argued that racial differences were produced by climatic ones or that god allocated the different races to the climatically appropriate regimes. (Painter, Jeffrey et al. 2009)
The European inhabitants were believed to be hard working, intelligent and rational, while Mediterranean were relaxed and emotional. Hot climates of the tropics were believed to produce morally and physically degenerated and lazy people. Those ideas were widespread and believed to be scientific facts. Even in 1957, they were still used by geographer Griffith Taylor. (Painter, Jeffrey et al. 2009)

Scientists had to explain why Europeans should rule the other races and justify the actions of the British Empire.
The partial adoption of Darwin's theory of evolution, where it is presented as preset and unchangeable was the common approach at that time.
One of those who have done that was the political geographer Friedrich Ratzel (1844-1904). He understood the state as a living organism, which needs living space. When this became insufficient, it has to be expanded. (Jones, Jones et al. 2004)
Ratzel was arguing that stronger states should acquire areas that were not exploited efficiently by their current residents. (Nayak and Jeffrey 2011)
Ratzel's theory is seen as the beginning of political geography.
Political Geography can be defined as the interplay of politics and geography. Politics can be defined as the interaction of power, politics and policy, where power sustains the other two. Geography is defined by the interaction between space, territory and place, with space as the core commodity. Political Geography recognises that these six entities are intrinsically linked and is defined by all of them. (Jones, Jones et al. 2004)

The British Empire is a very good example of the mutual reinforcement of politics and geography, space and power. Although academic geography has developed significantly since the times of imperialism, its influence remains and has left very visible marks on today's world.

Reference List

(2010). "Cambridge Econometrics analysis of ONS." from http://www.camecon.com/Home.aspx. (2013). "OECD." from http://www.oecd.org/. (2013). "Office for National Statistics." from http://www.ons.gov.uk/ons/index.html. Coe, N. M. and A. M. Jones (2010). The economic geography of the UK. London, SAGE,: xvi, 264 p. Fothergill, S. and T. Gore (2013). The implications for employment of the shift to high-value manufacturing. Jones, M., et al. (2004). An introduction to political geography space, place and politics. London, Routledge,: 202 p. An Introduction to Political Geography provides a broad-based introduction to how power interacts with space; how place influences political identities; and how policy creates and remoulds territory.

Martin, R. (2012). "Regional economic resilience, hysteresis and recessionary shocks." Journal of Economic Geography. Martin, R. L. and B. Rowthorn (1986). The Geography of de-industrialisation. London, Macmillan. Mohan, J. (1999). A United Kingdom? : economic, social and political geographies. London, Arnold. Nayak, A. and A. S. Jeffrey (2011). Geographical thought : an introduction to ideas in human geography. Harlow, Prentice Hall. Painter, J., et al. (2009). Political geography : an introduction to space and power. London, SAGE. Rowthorn, R. and K. Coutts (2013). De-industrialisation and the balance of payments in advanced economies.