By Maximilian Clarke
Germany’s approach to manufacturing could help the UK fuel its own manufacturing renaissance that could help the economy become less reliant on finance, the Trades Union Congress has today said.
German Lessons: Developing industrial policy in the UK looks at how government approaches to industry in Germany and the UK have differed since 1945. The report comes up with a number of suggestions as to how a more strategic, intelligent and active approach to government industrial policy could reap huge dividends for British manufacturing and the UK economy.
The report says that in the UK there is a great deal of emphasis on large firms and on the very smallest companies, but little thought or support is given over to medium-sized enterprises. Yet in Germany, the 'mittelstand' - a network of thousands of medium companies - is the backbone of the economy and a crucial part of the German supply chain.
The concept of the social market is as dear a principle to the German people as the NHS is to the British public says the report, and an economic system which brings management and workers together and has at its heart a strong positive role for unions and employers gave German firms a very definite advantage as the global economic slowdown began to take hold.
The TUC report also says that talented graduates in the UK are less likely to choose a career in industry than they are in Germany, and this combined with a three-year vocational training programme provides a massive boost to the country's manufacturing firms. Similarly Germany makes much more use of apprenticeships - around 40 per cent of school leavers are taken on by employers for three years, whereas in the UK only 6 per cent of 16-18 year olds were on apprenticeships in 2010, and most of these were for little more than a year.
"The government has got to adopt a smarter, more intelligent approach to the development of its industrial policy," comments TUC General Secretary Brendan Barber. "The UK economy is crying out for assistance and a revival in our manufacturing sector - and less of a dependence on the financial sector - will be a crucial factor in delivering growth and creating thousands of much-needed jobs.
"Too much of government policy has amounted to little more than tinkering at the edges, when what we really need to deliver a vibrant industrial sector is a new active, interventionist approach to manufacturing.
"The UK has much to learn from Germany - it is the powerhouse of the European economy and its politicians have never lost sight of the value of their manufacturing sector. But it's not too late for British manufacturing - a new approach to skills, investment and procurement could help bring the UK back to its rightful place as one of the major manufacturing nations of the world."
Join us on