This literaturereview includes fragments of official statistics and reviews that relate to thetopic of interest. This section will provide arguments for Britain’s downfallin its global rank in the manufacturing platform. Furthermore, this sectionwill explore, as well as thoroughly analyse factors that affect thecompetitiveness of the UK. They are aimed at developing a deeper understandingof the area of interest. Competitivenessconstitutes a major economic objective in the current context of globalization,frequently invoked by economic policy-makers worldwide. They usually associatecompetitiveness either with qualities that enable a high standard of living, orwith locational attributes that drive growth, affecting prosperity indirectlyand over the long term (Delgadoet al.
, 2012).The manufacturing industry is the sector withinternational competitiveness and it plays a major role worldwide. Figure 5shows that manufacturing accounts for around 10 percent of UK GDP. AlthoughBritain plays a significant role in the manufacturing industry, it haswitnessed a downfall in its economic factor, by decreasing its output perlabour.
Figure 5 Share of SME numbers, employmentsand turnover by industrial sector at the start of 2016. WhiteSteven. (2016) share of SME numbers, employments and turnover byindustrial sector at the start of 2016. Available at:https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/559219/bpe_2016_statistical_release.pdf (Accessed:12/10/2017).
Productivitydetermines the size of the ‘economic pie’ available to the citizens of acountry (Valero, Anna. pp1 2012).Productivity plays a vital role for a company,thus boosting the country’s economy. Productivity can transform resources intovaluable goods and services, potentially creating from less. However,productivity isn’t the only factor playing a role in the country’s economy,which may affect its performance in the global business platform.One point ofdiscussion in the further downfall of Britain has been the effect of Brexit asis affecting the United Kingdom downfall. The BCC director general Dr AdamMarshall said “We see some startlingresults.
Despite the buoyant European economy, we see an accelerating reductionin order pull from Europe. Clearly uncertainty is having a really significanteffect on customers’ choices of which country they buy from, and they’re notbuying from the UK anymore.” “Like-for-like sales are clearly down -down about 10%,” he said. “This is all due to Brexit uncertainty atthe moment.” (Marshall, Adam 2017).
Since the Brexit has taken place it has affected the downfall further leadingthe country into a position where many manufacturing firms are not sure of howthey can tackle this issue. Figure 6 shows how manufacturing companies feelabout the impact in their business by leaving Europe. Figure 6 Overall impact of Brexituncertainty. NitchSmith, Matthew (2016) Overall Impact of Brexit uncertainty. Availableat: http://uk.
businessinsider.com/uk-manufacturing-pmi-may-just-above-stagnation-as-brexit-fears-weigh-2016-6 (Accessed:12/10/17). Those factorsthat affect the performance include: high costs of equipment and materials tomanufacture the goods, faulty machinery, as it may be costly to purchase newequipment, which may affect Britain’s competitiveness in the global platform inaddition to that, the Brexit may bring changes to the UK which may affect theeconomy directly. For example, the pound rate may fall further, and the costsof imports may have a sudden rise. On the otherhand, there are several factors which shape Britain’s economy, such as:literacy and numeracy literates, as well as teaching the required skills andqualifications for a successful economy. For example, Figure 7 shows thatCambridge university is in the top three, worldwide, in aeronautical &Manufacturing Engineering, according to the QSrankings 2017.
This shows that the education system in the UK has a highranking, therefore it benefits the economy. Figure 7 QS world university rankings 2016and 2017 for mechanical, aeronautical and manufacturing engineering. (2016-2017) QSworld university rankings 2017. Available at:https://www.
theguardian.com/education/2017/mar/08/qs-world-university-rankings-2017-mechanical-aeronautical-manufacturing-engineering (Accessed:25/09/17).The country leads in deploying skills in keysectors such as aerospace, composite/nano/advanced materials, instruments andelectronics, and life sciences. (Hanley Tim and others pp61). The UKhas this factors that shape its economy, in the aerospace industrial strategyit is estimated to bring around 114 billion to the UK economy over the next 20years as well as to create additional 95,000 jobs by 2035 which will boost upthe United Kingdom economy. Figure 8 shows that aerospace contributes to£24billion to the economy every year and supports 230,000 jobs across the UK. Figure 8 UK aerospace.
(2013) UKaerospace. Available at: https://www.gov.uk/government/news/uk-aerospace-industry-receives-2-billion-investment (Accessed:24/10/17).
Superior innovationpotential The United Kingdom has emergedas an innovation leader in major manufacturing sectors such as automotive,aerospace, and pharmaceuticals among others. (Hanley Tim and others pp61)even after Brexit the United Kingdom has potential to overcome any issues as ithas very productive sectors.All in all, the UK takes thelead in key sectors such as aerospace and electronics which may boost up theUK’s economy over the coming years.
However, due to the uncertainty of Brexit,the effect of this process on the UK’s economy and competitiveness with othercountries is unknown as of yet. Therefore, the United Kingdom may lose interestfrom investors and additional fare charges may rise due to Brexit, resulting ina further downfall in Britain’s economy.