UK makers - march in lockstep with India ?
Business leaders the world over tend - in their public utterances at least - to be a fairly bullish crowd. Optimism is taken for granted . The glass is always at least half full - and is there is any doubt about that most will happily whip up some cheery froth to take it over the mark.
So it was - largely - when a group of India's corporate chiefs led by the Confederation of Indian Industry gathered in London last week for their annual conflab with the CBI. Annual growth rate in India slackened to a mere 5% or so ? It will bounce back. Rupee depreciated against other currencies? It's a good time to invest in India as assets are underpriced. The perennial concern over corruption - public opinion and political will are now beginning to work in tandem to improve things.
Four or five years this business leaders delegation made a foray to Birmingham as part of their UK visit ( the good offices of Lord Bhattacharyya were significant in this). There was a suggestion then that a Birmingham leg might become a regular feature - it might just be worth looking the resurrect that idea as a way of reinforcing business links with India)
The conference theme was India-UK partnership in reviving and restoring economic growth' and of particular significance was a session on the role of manufacturing in this bigger picture. India tends not be seen as a major manufacturing entity. The last two decade there have brought to prominence a service sector that is worldwide in operation and ambition. New players such as Infosys and Wipro have become global in a brief period. The great business houses such as Tata have grown service and IT businesses rapidly .India is often seen as having made the move from agriculture and artisanship to a service driven economy without pausing to acquire a manufacturing sector.
This of course is less than the truth. India actually ranks ninth among the manufacturing countries in the world but manufacturing contributes a little over 13% of India's GDP ( a proportion that shrank in the decade 2000-2010 ) and is a little more than a third of the equivalent statistic for China.
Recent research by both Accenture and McKinsey featured in the conference debate. The opportunity created by a growing population and income levels allied to improvements in productivity and management could almost double the share of manufacturing in India's economy by 2025. The capacity for the vital productivity improvement is highlighted by the statistics quoted by McKinsey to the effect that Tata Steel alone increased its productivity some eightfold between 1998 and 2010.
India's scope to drive ahead in the manufacturing sector on the basis of its own population growth will also place it to act as a major provider to other fast growing consumer markets in south and east Asia - challenging China's assumed continuing dominance in this regard. Within India the view among business is that the obstacles to converting that opportunity lie in some crucial fundamentals such as scale and security of power supply as well as skills availability and managerial capacity. Securing the investment to address these deficiencies is a major priority for government and business.
Meanwhile back home in the UK and the Midlands, we heard much a little while ago about the rebalancing of the economy and of a greater focus on manufacturing within that. The slogan 'the march of the makers' was bandied about as a summary of that. (The continuing crisis in the Eurozone and beyond may mean that it's rather more 'marking time' than a 'march' right now.)
There perhaps something just a little too glib and complacent about the 'march of the makers' phrase anyway. It conjures up an image of British industry somewhat imperiously sweeping its way in good order to an inevitable place towards the head of the global queue.
Anyone actually engaged in trading goods or services internationally these days particularly into those markets where - if falteringly - some dynamism lingers know only too well that ( to pursue the military analogy just a little further) it is a situation where the terrain is unfamiliar - and even treacherous - and where the rules of engagement are themselves vague and shifting. And if India begins to punch anything like its weight the challenge in global manufacturing is just so much greater.
Which takes us straight back to the CII delegation and their conference theme of India-UK partnership. We see two nations each determined to place manufacturing in a more central place in their economies Their presence here highlights a willingness to test the scope for co-operation that given the vital task of rebalancing the UK economy and the challenges that presents, it would be daft to ignore the advantages in the fast -changed and faster-changing world we all inhabit.