Technology revives British industrial might

British manufacturing could be on the verge of a renaissance

Now that the dust of the financial crash has settled, Britain must decide what to do with itself. Brush the flash City cats down and plonk them back on their fat thrones? There's an option. Pack them off to the colonies on the next prison ship? Agreement might prove elusive on some matters, but on at least one point the country has a consensus. An insubstantial faith in services got us into this mess, and only science, engineering and technology will get us out of it.

"We need less financial engineering and more real engineering," business secretary Lord Mandelson said in his speech at the recent Labour Party conference. The Conservatives say as much, though not having the public purse they cannot claim £750m investment in tech research. Nevertheless, this refrain has been reverberating around Britain's sci-tech community like the bagpipes at Rorke's Drift, as the 10th annual Cambridge Enterprise Conference at the University's Churchill College last month made apparent.

Delegates at the conference - advisors, middlemen, moneymen - were feeling what there was of terra firma after the crash and finding the stuff of Britain: a manufacturing heritage to make your eyes go misty. But the technologists in the exhibition area were, as ever, merely hoping to secure some investment so that they could start manufacturing.

This contrast demonstrated how the romance and the reality of British manufacturing are in conflict. It was a latent theme of the conference, and one that will decide whether Britain can make the success it would claim for its sci-tech industries.

It stems from the reasons why manufacturing is back in the fore after being the unfashionable cousin of services for so long. Dennis Turner, chief economist at HSBC, told the Cambridge conference delegates that this was because manufacturing was the only "sensible" way for Britain to make any sustainable recovery from the recession.

Some 80 per cent of the recent boom had been based on the retail, construction and financial services industries, he explained. It had been almost entirely dependent on domestic spending and this is where it fell down. There was little other money to invest in export industries and, since the country earned less in trade, determined shoppers used debt instead of hard readies. The rest we know from recent history.

Had Britain invested more money in widgets than it spent on manbags, in other words, it wouldn't be in such a precarious position as it is now. The way out of recession, then, was to boost exports. "It's a global game," Turner told V3.co.uk after the conference. "And there's nothing very global about retailing."

Manufacturing decline
British manufacturing might be back in fashion now, but 10 years ago it had been consigned to history. It was given a revered place in the national narrative alongside the war dead. Manufacturing, on which Britain founded the industrial revolution, built an empire, won two world wars, and established a labour movement, all destroyed by Thatcher, or so the story goes.

The crash has since altered the narrative. Steve Bone, chief executive of nu Angle, an R&D consultancy, graduated with a year of first-class chemists from Cambridge in the 1980s, only to be tempted with the rest into high-pay banking and consulting jobs. Post-war industry, meanwhile, was being run by " classics graduates", "accountants, and asset strippers". Other scientists and engineers were enticed abroad and Britain's flagship industries declined, Bone told V3.co.uk in the apt location of the Churchill College bar.

Collar someone over 50 and ask them about British manufacturing and you will soon be wanting a drink, especially if they are a northerner. You will hear of once-productive greatness transformed into a vast shopping centre.

Part of the trouble, according to Robert Scott, a northerner and export consultant with TradeReach, was that manufacturing became a proud tradition. Begun by technological innovators like Robert Stevenson, it became mired in the staunchly conservative heart of the northern industrial labour movement for which the protectionist phrase "but we've always done it this way" became an epitaph. By this telling, the industrial North stopped innovating because it mistook the romance of its greatness for greatness.

The nationalists too believe that sci-tech manufacturing will make Britain great again. They see the story running thus: chivalric days of empire and industry; island nation beset on all sides by foreign financial and intellectual capital; heroic stand at the White Cliffs of Dover; and final deliverance of a proud manufacturing industry from the shackle of compromise.

The reality demonstrated by those technologists at the conference stands in contrast to this romance like dark, satanic mills with the Silicon Fen. Britain's very survival, say the nationalists, depends on a " technology-intensive manufacturing base, protected from globalisation and rampant internationalist exploitation". They would close Britain's borders and molly-coddle British industry as through it were a heritage museum like the Chatham Dockyards.

Global co-operation
The world, however, has moved on. The likes of the Cambridge technologists span borders with more intimate ties to foreign financial and intellectual capital than ever before attempted under capitalism. This has come about precisely because of the intensity with which science and technology is applied to production. Hi-tech export goods are derived from an international dialogue of scientific research, and developed by a trans-national community of nerds for whom patriotism is as meaningless as Prada: Indian software developers, German chemists, Russian materials scientists, British geneticists (and consultants).

While globalisation has intensified competition for British manufacturing firms, it has created an imperative (perverse to both the nationalist and business ethos) for firms of different nationalities to co-operate more.

Peter Wierenga, chief executive of Philips Research, told the Cambridge technologists how this imperative had manifested itself in the Open Innovation movement that it and firms like IBM had been forced to embrace.

Globalisation has increased the likelihood that a tech firm will come up against superior competitors. A mould-busting technology is likelier than ever, yet it is more complex and expensive to produce. Firms that don't look to other firms, other industries and other countries for ideas to share may find they become obsolete, or even that they waste resources reinventing things already done elsewhere.

The alternative, described by Wierenga as the "not invented here syndrome", is something like corporate nationalism. Companies like Philips and IBM, which traditionally farmed new technologies using herds of scientists in vast tech parks for their and their nation's sole glory, can no longer compete with the immense migratory flows of ideas flooding the open market. So they share their R &D with other firms. Philips has sited a research centre in Cambridge so it can collaborate with university spin-offs. The Cambridge technologists are glad of the investment opportunities this brings, as well as the help onto world markets.

This can be an inconvenient state of affairs for someone seeking the simple reassurance of a national manufacturing resurgence at a time of financial hardship and uncertainty. But if Britain could depend only on itself to buy its goods, and converse only with itself over its ideas, it would soon narcissistically choke on its own vomit, if it didn't suffocate on sentimentality first.