Service systems can include manufacturing operations in an ecosystem of engineers with advanced degrees, and tradespeople with hands-on know-how.
James Dyson … 64, is even better known as the leading proponent of the suddenly popular idea that Western nations ought to return to manufacturing and exporting physical goods, after decades of shifting the roots of their economies to services, property and finance. [….]
In the United States, his argument has become a key front in the current electoral battle: Reindustrialization is a byword in many Republican primaries, such as this week’s showdown in the Rust Belt state of Ohio. Meanwhile, President Barack Obama’s lines on “green” manufacturing, innovation and education closely track with those of Mr. Dyson, who took to the U.S. airwaves last month, arguing that the school system should be far more oriented to science and engineering, especially in poor neighbourhoods.
The problem, he explains in his crisp middle-class English, is that countries such as Britain, which was known two generations ago as “the workshop of the world,” have had the factory stripped from their DNA.
“We’re traders and exploiters, we’re the City of London, that’s our culture,” he says. “So you have a greater status if you go into banking than you do if you go to a manufacturing firm in Birmingham and make something real and export it, and create wealth that way. That’s the problem – it’s historical. It’s in our schools, it’s in our culture and it’s in our government.”
In fact, Mr. Dyson, Britain’s most famous manufacturer, doesn’t actually manufacture anything in Britain. He hasn’t done so for 10 years, since he was refused local permission to expand his Wiltshire factory and came to the realization, as thousands of other manufacturers have, that hardly any of the components of his machines were made in Britain any more. So why not move everything to Asia, where it’s simply easier to build things?
“There ought to be huge advantages to manufacturing in England,” he says with an indignation that hasn’t dulled over the decade. “This is where our headquarters are, it’s where our managers are, our engineers. We’ve got two bigger offices in Singapore and Malaysia, and we don’t want to do that – it’s a logistical nightmare – but we’re forced to do it.”
It’s not the labour, he says. Few companies shift their manufacturing overseas because of lower wages; in fact, many of the factory jobs for companies like his require some postsecondary education.
“Wages are a tiny percentage of our manufacturing cost,” he says. “We’d happily pay British labour costs rather than Southeast Asian labour costs and not have to manufacture 8,000 miles away. The reason we went there is that we weren’t allowed to expand, and all of our suppliers were in the Far East. Why buy a British plug cable made in Taiwan, ship that all the way back to England to install it, then ship that all over the world? The problem we face now is that China and the Far East are manufacturing economies, and shortly probably India and South America. And we can’t compete with that. … It’s the cost of our whole infrastructure, our employment laws and our skills … the management skills in particular. And we’re a very expensive place to make things.”
Full article as “James Dyson reinvented the vacuum. Now he wants to remake the economy” | Doug Saunders | March 9, 2012 | The Globe and Mail at http://www.theglobeandmail.com/news/world/europe/james-dyson-reinvented-the-vacuum-now-he-wants-to-remake-the-economy/article2365077/singlepage/#articlecontent.