This literature
review includes fragments of official statistics and reviews that relate to the
topic of interest. This section will provide arguments for Britain’s downfall
in its global rank in the manufacturing platform. Furthermore, this section
will explore, as well as thoroughly analyse factors that affect the
competitiveness of the UK. They are aimed at developing a deeper understanding
of the area of interest.

 

Competitiveness
constitutes a major economic objective in the current context of globalization,
frequently invoked by economic policy-makers worldwide. They usually associate
competitiveness either with qualities that enable a high standard of living, or
with locational attributes that drive growth, affecting prosperity indirectly
and over the long term (Delgado
et al., 2012).

The manufacturing industry is the sector with
international competitiveness and it plays a major role worldwide. Figure 5
shows that manufacturing accounts for around 10 percent of UK GDP. Although
Britain plays a significant role in the manufacturing industry, it has
witnessed a downfall in its economic factor, by decreasing its output per
labour.

Figure 5 Share of SME numbers, employments
and turnover by industrial sector at the start of 2016.

 

White
Steven. (2016) share of SME numbers, employments and turnover by
industrial 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).

 

Productivity
determines the size of the ‘economic pie’ available to the citizens of a
country (Valero, Anna. pp1 2012).

Productivity plays a vital role for a company,
thus boosting the country’s economy. Productivity can transform resources into
valuable 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 of
discussion in the further downfall of Britain has been the effect of Brexit as
is affecting the United Kingdom downfall. The BCC director general Dr Adam
Marshall said “We see some startling
results. Despite the buoyant European economy, we see an accelerating reduction
in order pull from Europe. Clearly uncertainty is having a really significant
effect on customers’ choices of which country they buy from, and they’re not
buying from the UK anymore.” “Like-for-like sales are clearly down –
down about 10%,” he said. “This is all due to Brexit uncertainty at
the moment.” (Marshall, Adam 2017).

Since the Brexit has taken place it has affected the downfall further leading
the country into a position where many manufacturing firms are not sure of how
they can tackle this issue. Figure 6 shows how manufacturing companies feel
about the impact in their business by leaving Europe.

 

 

 

Figure 6 Overall impact of Brexit
uncertainty.

 

Nitch
Smith, Matthew (2016) Overall Impact of Brexit uncertainty. Available
at: http://uk.businessinsider.com/uk-manufacturing-pmi-may-just-above-stagnation-as-brexit-fears-weigh-2016-6 (Accessed:
12/10/17).

Those factors
that affect the performance include: high costs of equipment and materials to
manufacture the goods, faulty machinery, as it may be costly to purchase new
equipment, which may affect Britain’s competitiveness in the global platform in
addition to that, the Brexit may bring changes to the UK which may affect the
economy directly. For example, the pound rate may fall further, and the costs
of imports may have a sudden rise.

                                                                                                            

On the other
hand, there are several factors which shape Britain’s economy, such as:
literacy and numeracy literates, as well as teaching the required skills and
qualifications for a successful economy. For example, Figure 7 shows that
Cambridge university is in the top three, worldwide, in aeronautical &
Manufacturing Engineering, according to the QS
rankings 2017. This shows that the education system in the UK has a high
ranking, therefore it benefits the economy.

 

 

Figure 7 QS world university rankings 2016
and 2017 for mechanical, aeronautical and manufacturing engineering.

 

 (2016-2017) QS
world 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 key
sectors such as aerospace, composite/nano/advanced materials, instruments and
electronics, and life sciences. (Hanley Tim and others pp61). The UK
has this factors that shape its economy, in the aerospace industrial strategy
it is estimated to bring around 114 billion to the UK economy over the next 20
years as well as to create additional 95,000 jobs by 2035 which will boost up
the 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) UK
aerospace. Available at: https://www.gov.uk/government/news/uk-aerospace-industry-receives-2-billion-investment (Accessed:
24/10/17).

 

 

Superior innovation
potential The United Kingdom has emerged
as 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 it
has very productive sectors.

All in all, the UK takes the
lead in key sectors such as aerospace and electronics which may boost up the
UK’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 other
countries is unknown as of yet. Therefore, the United Kingdom may lose interest
from investors and additional fare charges may rise due to Brexit, resulting in
a further downfall in Britain’s economy.