PER 2015
businesses are able to borrow at a low price and increase investment; without support from the government. A way of intervening in the market to support manufacturing would be through subsidies which ultimately can cause an increase in the level of reliance on the state; reducing productivity; and eventually harming the economy. The banking sector will only invest or provide financial support to firms which they deem conceptually excellent or productively good, therefore this form of investment helps to wean out the inefficient and weak firms; ensuring a strong base for the industry to grow. There is a growing concern that Britain would be unable to sustain a growing economy without a strong manufacturing industry to support this growth. Yet the view that we have “lost a whole generation” 18 has been dispelled by the consistent growth of GDP which at 1.7% annual change (2013) outstrips every European Country. This is through the development of a service based economy; which continues to grow thanks to the digital revolution which has led to London driving the creation of new types of jobs, increasing from 8.6% to 9.8% of total employment between 2004 and 2014 12 . With this new digital age it has meant there being less pressure on human labour for the manufacturing of goods; one could say that it is a dieing industry in itself; in the sense that the demand for manufacturing labour will never hit the levels of late 20 th century. As one industry of low skilled labour declined, a new service based economy grew. The gap created by the fall of manufacturing has being filled by this the emergence of the tertiary and quaternary industry in the UK; which has focused itself around London. Urban Sprawl helps to identify this, as the mass movement created by rapid urbanisation leads to the vast spread of built-up areas. Figure 3 shows the trend population of London,
Figure 3 13
with the recent figures of growth emphasising the point that London is still growing because workers are attracted to job centres such as London which are at the forefront of job creation. The shift towards urban areas highlights the fading rural manufacturing trade and the emerging new market of services, proving
manufacturing may not be that key for future growth and that the UK can adapt and emerge a period of decline in the late 20 th Century. Margret Thatcher sought to act as an advocate of the privatisation of state-owned industries and utilities in an attempt to reduce government intervention; with the aim of maximising efficiency. Thatcher believed in minimal intervention and very much distanced herself and the conservative party from a falling industry. The subsequent decline in manufacturing was counteracted by this emergence of this new market, which continues to flourish with minimal government intervention.
18 http://www.theguardian.com/business/2011/nov/16/why-britain-doesnt-make-things-manufacturing 12 http://www.pwc.co.uk/en_uk/uk/assets/pdf/ukeo-mar2015-summary-report.pdf
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