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Why Doesn't Britain Have a Huauei of its own?

Peter Brooks
This was the headline in the Guardian Opinion section for May 8 th 2019 written by Aditya Chakrabortty.


To answer this question he examines the history of GEC after Arnold Weinstock left in 1996  and <quote> "all hell broke loose" with the appointment of George Simpson (an accountant), and John Mayo (from the Merchant Banking world).


Even companies outside of Britain (examples RCA and Westinghouse)  have been afflicted by the same upper management failures.


What does Britain have to do to create a business climate that will allow world class companies to thrive?


Peter Brooks MIET

Palm Bay Florida USA
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    Many books and articles have and will be written yet about international competitiveness. It could reasonably be argued that it was impossible for the UK to retain competitive advantage in ways that it once enjoyed in the face of globalisation. It is also the case that over the last twenty years our universities have been full of students from China and elsewhere. In some sectors of industry intellectual property has been exported, but most offshoring of manufacturing and production has simply been cost driven , allowing UK consumers to easily afford products like mobile phones. In my younger days products like televisions and later video recorders were unaffordable to many and had to be foregone or rented.


    Twenty five years ago there were predictions that ICT (the internet) would transform the way we lived our lives, which after the dot-com crash seemed like hype, but eventually it is coming to pass. Knowledge, including intellectual property is readily shared. I have no expertise in ICT but my working assumption is that Huauei is producing products that we fully understand and are simply being chosen on the basis of competitive price/performance. As in everything we do we need to fully understand the nature of any risks in relation to benefits and manage them appropriately. If we lack the necessary expertise to do that, then that is a most terrible crime.  


    I agree that we have lacked coherent industrial strategies from which policies to target investment on improving productivity, including through skills training should be driven.  I also agree that just creating “graduates” who don’t have graduate type jobs to go to isn’t an industrial strategy, it is a social one. I’m a great enthusiast for apprenticeships which allow a young person to become economically productive as soon as possible whilst still learning life and professional skills.  


    Many have criticised the expansion of higher education in the UK and even belittled some degree courses. I disagree and think on balance that the expansion of HE has been beneficial, but I would prefer to see a much stronger emphasis on flexible provision for people in employment, perhaps even an “entitlement” to either degree level or vocational training of similar economic value (Electrician, Plumber etc) able to be taken up at any age.  Our university system, which was until recent decades used by only a small fraction of society has become one of our largest industries, routinely processing nearly half of all young people for at least three years, before they then think of meaningful skilled/professional employment.


    Would it not be hugely more effective if most of these young people undertook employment based training, supported with appropriate learning? An important role of former Polytechnics (and some 1960s Universities) was to support the needs of local industries, but inevitably many have moved to compete for non-local full-time undergraduate students and in academic league tables, acting as pure “educators” or even “social experience providers”  rather than with a vocational purpose. Many young people are therefore making choices based on local nightlife, rather than career prospects. With “going to uni” like “gap years” etc just becoming a modern rite of passage.  I won’t complicate the argument by bringing local Further Education Colleges into it (see below) but they are a vital part of the mix.              


    An unforeseen consequence of strategies like privatisation was the loss of apprenticeship opportunities in many parts of the country that were offered by major strategic infrastructure industries. Inevitably sectors like financial services are concentrated in major commercial cities, especially London.  When I was looking for my first job (aged 15/16) apart from the Armed Services, most opportunities with further training in my part of the country were with the nationalised industries. So people like me were trained by and in my case later became a trainer then training manager in well-resourced excellent vocational training establishments. These were mostly lost during the 1990s. Obviously we cannot turn back the clock, but we should focus on ensuring that we build on what advantages we have to create skills and productivity.  


    It would be naïve to suggest that skills training is the simple answer to a range of complex questions, I’m just better just better qualified to address that angle. If anyone has the same interest, then look up the work of Ewart Keep http://fetl.org.uk/wp-content/uploads/2018/07/FETL_scriptingthefuture-web.pdf  is an example. For those who wish to contribute to IET policy   https://www.theiet.org/impact-society/sectors/education-and-skills/                                       

          

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    Alex:


    Positive Leadership (not dictatorship) is a major factor in these types of social problems.


    Everyone wants to emulate Silicon Valley which may not be the right answer for the UK.


    There is one thing in the US that doesn't get enough public attention that it the role of DARPA in creating new technologies.


    DARPA has been a hidden factor in setting direction and seed funding- it effectively caused the creation of microcircuit manufacturing after basic discoveries in Bell Labs.


    Peter Brooks MIET

    Palm Bay Florida USA


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    We have adopted a culture where achievement isn't "cool", and getting an education is a bind. In other countries, getting skills and achieving through genuine innovation are still respected. How to change it? When I'm PM I'll let you in on the secret.
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    Alan: You misunderstood my comment concerning "Education".


     I was not talking about formal education but "selling" the political direction to the general public.


    Having a mismatch between what a country needs and what is being produced by universities is a serous problem, however I believe that is topic for another blog.


    Peter Brooks MIET

    Palm Bay Florida USA
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    Peter Brooks:

    Obviously government has to be involved in providing direction and "seed" funding, but unbiased countrywide public pressure/education must come first. 




    You have to tread carefully with this one. I consider a 'speculative' education programme where jobs for people with the education and qualifications do not currently exist to be unethical and immoral. Graduate unemployment and underemployment, even in STEM subjects, is sadly all too high at the moment in Britain. An even worse situation is Egypt that has a massive glut of graduates and well educated young people who are working in menial jobs such as taxi drivers or as shop assistants because they economy just cannot absorb them into careers related to their qualifications or even mid-range jobs for that matter.


    The reality is that jobs are created and industry expands with INVESTMENT. then skilled and qualified people follow. As you have previously stated this requires Political will/direction and MONEY! as opposed to education.


    Engineering graduates who can't find engineering jobs don't necessarily become good maths teachers in schools and it sends a disturbing message to students and their parents.


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    Regarding China, the latest market research from a well known US investing company has the following observation:-


    "As wages have risen, China has become less competitive and has moved out of several low-value manufacturing areas. Much of the manufacturing capacity concentrated in southern China, for example, either has been closed or moved away. 


    China is now moving up the value chain, with a growing amount spent of research and development in such high tech areas as AI, facial recognition and even cancer research." 


    Peter Brooks MIET

    Palm Bay, Florida USA
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    Peter Brooks:


    I don't think that the majority of parts used in electronics systems need to be sourced locally anymore.




    Back in the 1950s Japan used to manufacture radios from imported electronic components. They no longer do this but the Japanese electronics industry has transformed into developing and manufacturing advanced electronic components. The assembly of systems from these components now generally takes place in low wage countries.


    The high value processes in manufacturing digital cameras are the optoelectronic components and the semiconductors. Manufacturing and assembly of the camera itself is lower value process that can be carried out by a contract manufacturer anywhere in the world.


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    If you go back a little further in time you would have mentioned Marconi Osram Valve (MOV) company where I started work.


    I don't think that the majority of parts used in electronics systems need to be sourced locally anymore.


    Yes Apple assembles its product in China but the majority of the parts come from companies in other countries - example Samsung in South Korea. The small low weight parts can be transported by air for "Just in Time" operations.


    There are still certain sheet metal parts that require a machine shop operation but that may disappear in the future with low cost 3D printing. Maybe a local source of high frequency multi-layer PCB's would be desirable based on local CAD system designs. Attachment glues can be purchased from Japan and South Korea. These are not show stoppers.   


    So it gets back to Political will/direction and MONEY!


    Peter Brooks MIET

    Palm Bay Florida USA



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    Maurice Dixon:

    Perhaps because UK hasn't had and still doesn't have real industrial strategies. Also, too many decades, as a dogma and mantra of 'market forces must dominate policy',  successive UK government have allowed all its best IT companies to be bought by foreigners that then get saddled with buyers financial problems, profits exported, UK tax payments reduced through accountancy manipulations, pensions raided or poorly funded, etc - a loss, loss scenario for UK plc and national industrial capability?




    Would you consider it to be the result of a succession of 'unpatriotic' governments when it comes to infrastructure and strategic industries?


    I have long suggested that what is needed as an alternative to the economic policy that has prevailed since 1979 is not a government based on socialism but one based on nationalism. Basically a government that is a respectable version of the BNP!


    Has the EU been instrumental at eroding away engineering in Britain since 1979? The IET campaigned for Remain back in 2016 but would there be potentially better opportunities to revive strategic industries after Britain has left the EU?


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    GEC, Plessey, Marconi, ITT, STC  are the big non-existent UK names who might have been, but behind them were very many smaller makers of the test gear and the design tools, like Advance (of signal generator fame), Cossor ( 'scopes and  test receivers) AVO for meters, and many others - along with smaller essentials to a fast R and D operation. The PCB prototyping houses, the folk who can make metal boxes quickly, in effect without the big demand, the entire infrastructure of these businesses slowly withers, ideally you need indigineous capability not just to design 'phone hardware, but to build the network analysers, design and make the antenna arrays, manufacture substrates for RF PCBs etc.  Esssentially, over the last 30 years or so it has either closed totally, or become an importing shop for other countries skills.


    It is very telling that there are no semiconductor foundries making microwave ICs in the UK, and no makers of high frequency PCB material or the small passive components like Mullard and EMI and others used to do, so it all has to be imported, and that makes it slow and expensive compared to the folk who can just get something sent in the post next day from within the same country.


    So it just never gets off the ground.

    You can debate the detail  of the cause, but once its gone, short of a wartime type stimulus, it will almost certainly not restart.

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