What makes Britain Rich?

What makes Britain Rich? on BBC2
Since we have become a service orientated country, I fail to understand how the UK ticks over, with only limited manufacturing in only specialist areas
and with outsourcing increasing. Peoples debt increasing, governments always looking at new ways to collect tax from all different angles, we can't afford to kit out our soldiers in the battlefield. What does the future hold for us?, Asia is rapidly growing.
Missed the programme!!! Didn't anyone watch it? Is it going to be repeated?
What did you make of it? What was covered?
Many thanks
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snipped-for-privacy@blah.com (Avari) wrote:

We buy stuff off each other using MEWed equity from our housing stock. It's a financial perpetual motion machine. Brilliant!
Or maybe global liquidity and Russian financial exiles keeps giving it a sneaky nudge when nobody's looking. That'll go on forever, obviously.
Andrew McP
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Although I personally think it's a shame that we don't make stuff here any more, I don't see why the country actually needs manufacturing to survive. We can still have a very healthy economy with a mainly service based economy, provided that foreigners are using our services at least as much as we are buying physical bits of kit from all the foreigners.
Adam
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On Fri, 5 Jan 2007 13:09:11 -0000, Adam wrote:

According to the programme, in the 50's manu accounted for 36% of the country's wealth (GDP?). Nowadays it's down to 13%. However, the reduction is only in proportion to the growth of the economy as a whole. In absolute terms (i.e. amount of "stuff" made) I think the prog. said we actually make slightly more now - it just takes a lot fewer people.
Pete
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But we also use a lot more stuff. If we had kept our manufacturing base and due to efficiencies produced four times as much with the same people, there would still be a demand for that production.
tim
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On Sat, 6 Jan 2007 12:38:13 -0000, tim..... wrote:

Agreed. The more stuff we use is what's caused the growth in the economy, no arguing with that. One major difference between now and then is globalisation. In the 50s, the cost of transport was so high that it was too expensive to move low-value freight around the world. The costs only started to come down when containerisation took off during the 60s and 70s. Until then, the UK was not in competition with the far-eastern economies. It's the competition element that has led to the reduction in manu. Since this is a finance group, look up "economic advantage" to see why.
Pete
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wrote in message

I agree.

But here I don't:
We still make stuff so what we make must still be competitive or we wouldn't be making it.
Other European countries (Germany, Italy, Sweden) have a manufacturing sector which hasn't shrunk as much as ours, yet they still compete.
We could have a kept a bigger manufacturing sector than we did, but we just decided that we weren't interested, partly becuase the jobs aren't as nice as the ones in 'newer' sectors.
Unfortunately, these newer jobs are starting to move elsewhere (for the same reasons as manufacturing) and the things that they 'make' are often non tangible and are much easier to 'transport' back.
We may live to regret exporting so many of our manufacturing jobs.
tim
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Hmm, maybe in the '50s, but would you consider coal to be low-value?
Derek Lundy in _The Way Of A Ship_ talks about the (fictional, but based on true accounts) voyage of an iron-hulled saling ship round the Horn from Liverpool to Valparaiso in 1885.
At that time it was economic to mine coal in Wales and ship it by square-rigger to Chile, to be used by the coastal steamers & steam trains.
Puts a different slant on UK coal-fired power stations using Polish coal...
rgds, Alan
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wrote:

It was an interesting programme and that was one of many interesting snippets. I think it was something ridiculous like more is made by just 5% of the former workforce.
Daytona
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It won't just stop at manufacturing, goods made in China come in packaging made in China and printed in China, USW USW USW.

Where there is no "iron mountain" of machinery or buildings, or any real infrastructure needed and no manual skills to be taught to the workforce, competition from 3rd world Asia (just for instance) can come in and take your customers very quickly.
I've had friends working in insurance, who laughed out loud at the prospect that the Chinese might one day (say) move into the Marine Insurance business.
I wouldn't bet on it, least of all bet my livelihood on it.
DG
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My cousin is a (reasonably) well paid claims assessor.
His employer, having offshored their basic call centre functionality, are now looking to offshore his skill.
tim
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Avari wrote:

We borrowed the money. We have the appearance of being rich. We haven't yet had to pay it back. When we have to start paying it back, we'll be poor.
Toom
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Especially as all the jobs will have gone offshore
tim
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It was a highly interesting and informative programme. I went on to the BBC website expecting the stats to be available, but they weren't.
The answers to your questions were in the programme.
Most of the other areas have grown more than making up for the lack of growth in manufacturing.
British companies outsource, make much larger profits which are then distributed to British shareholders via life funds, pensions etc.
Financial services industry make a huge amount as the trillions of pounds pass through some of the largest world markets, based in London.
Daytona
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For a bit.
It's comparatively easy to compete with a company that does that, as opposed to a company that keeps all it's technology in house.
One Chinese sweat shop is as competitive as any other, the customers realise this and will no longer pay premium rates for perceived quality.
However ATM they will still pay premium prices for designer branding.
I wouldn't like to think the security of my children's livelyhood for the next 40 years depended on punters continuing to pay 85 quid (on their credit cards) for a pair of designer running shoes that had cost USD 3.00 to make in Vietnam, hence "much larger profits".

Financial services includes insurance (I think). Our company used to manufacture machines that sold to the end users for £23,000. The profit on the manufacturing was probably about £7,000 per machine.
The cost of the marine insurance on one machine was £60.00. Lets say the profit on the insurance was £35. So the City of London needs to insure 200 machines to equal the profit on the manufacture of one.
It doesn't look like a Bonzana to me.
Having given away manufacturing, What do we do when the Chinese (inc. Korea and Hong Kong) move into financial services and insurance. they already have their own shipbuilding companies and shipping /container lines.
http://www.hanjin.com/en/main.jsp
DG
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How much time and effort is there in the manufacturing process vs how much in signing a piece of paper ? (and sorting out the occasional claim).

What will happen is simply that the value of their currency will rise and their costs will become equal/greater than ours, so we will end up working in the sweat shops again.....
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On Mon, 15 Jan 2007 09:06:02 -0000, "Miss L. Toe"

....and the sooner that happens the better. It's inevitable that developed countries will be undercut; the shorter the time period the better.
Unfortunately too many thick people may demand protectionism which, apart from the dangers of conflict, will only act to prolong the suffering.
Daytona
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