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Industry should build on manufacturing heritage

WORLDWIDE: At the turn of the century, many considered manufacturing-based economies to be outdated if not headed for extinction.

At a time when many economists, politicians and business leaders argued we should prepare for the information-technology based "new economy" as the inevitable outcome of the transition from manufacturing-based to post-industrial service-based economies, Irish writer Eamon Fingleton published a book called In Praise of Hard Industries: 'Why Manufacturing, Not the Information Economy is the Key to Future Prosperity' in 1999.

Around the same time, one leading economist wrote that advanced economies should not even consider large-scale manufacturing anymore, and leave that to low-cost countries such as China and India. Advanced nations should instead concentrate on service-based activities. He specifically pointed at Germany with its traditional industry politics and strong industrial base, where this insight was still grossly lacking.

In stark contrast, Fingleton called the new economy a time bomb, suggesting that since the 1980s per-capita incomes had risen faster in the typical manufacturing nations of Germany, Japan and Switzerland compared with the de-industrialised US, UK and Canada. He warned that building industrial manufacturing know-how is difficult, while the necessary skills development requires a long learning curve. De-industrialisation increases a nation's vulnerability, whereas loss of skilled technical jobs results in traditional middle-class shrinkage and if jobs are replaced, new jobs tend to be of the low-paid, service-type "McJob" variety, according to Fingleton.

The euphoria on the long-term benefits of the new economy proved shortlived. First the dot.com bubble burst in 2000, then the financial sector was blamed again for the 2008 credit crunch, whose huge negative impact is still felt today. It also fuelled calls for a return to "real economy" values and principles through rebuilding manufacturing capabilities and hard industries.

Fourteen years after Fingleton's book was published, the UK has one of Europe's most ambitious wind energy programmes to build 18GW of new offshore wind farms by 2020, representing more than EUR50 billion in investment. Critics have warned that much of this sum could do to foreign parties due to a lack of domestic suppliers of main components and complete turbines.

Based on findings of a new report by trade body RenewableUK called Building an Industry, UK newspaper The Guardian recently reported that as many as 32 new factories are needed to build the components for these envisaged British offshore wind farms. The sector could potentially create tens of thousands of jobs, but so far only ten such factories have been built or are planned in the UK, according to RenewableUK.

"This is a once-in-a-generation opportunity. If we don't seize it, the large scale offshore wind supply chain factories of the future, making the blades, towers and foundations that we'll need to retain the UK's global lead in offshore wind will be sited elsewhere," warned RenewableUK CEO Maria McCaffery.

Although all turbines currently installed in UK waters were made by Germany's Siemens and Repower or Denmark's Vestas, Michael Fallon, the Conservative energy minister, said the government was committed to the sector: "The UK leads the world in offshore wind. This is a major success story and one we should all be proud of. Not only do we have more installed offshore wind we also have the largest wind farms and a real knowledge base about how to build offshore wind farms."

Missed opportunity?

At a Dutch-Anglo wind event earlier this year I spoke to representatives of RenewableUK and various regional UK business development organisations. I asked why the UK's industrial development initiatives seem to focus on component manufacture and on inviting foreign turbine suppliers to establish local production facilities. Another thing that continues to puzzle me is why current UK offshore turbine-development initiatives seem to concentrate on high-risk projects such as the 10MW vertical-axis Aerogenerator X and VertAx Wind turbines, and show little interest in copying the successful strategy of several Asian wind market entrants. Firms such as Ming Yang and Sinovel of China and south-Korean industrial giant Hyundai use specialist technology providers to acquire conventional state-of-the-art wind technology, benefitting from a fast-track learning, short time to market and much reduced product development risks.

The responses I got from several representatives from RenewableUK, local councils and regional development agencies was that nobody seemed to know, even though the questions had been asked before. Both the wind industry and the UK - the birthplace of the industrial revolution, with its centuries-old engineering excellence and manufacturing heritage - deserve a better answer.

Eize de Vries is Windpower Monthly's technology and market trends consultant

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