I rang Emma, suddenly fearful that she and her husband Matthew Rice might bow to the realities of modern management and flee Stoke for Indonesia. "No way!" she said. They\’re building a new factory, only yards from their Victorian one in Lichfield Street, Hanley. "Stoke really works for us. There\’s a brilliant workforce, they\’re so skilled, their shifts are all organised to suit them. And having our manufacturing close by – we live in Oxford – means we can switch it on and off. Manufacturing\’s HARD, you know. You always want to make the things you\’re good at rather than things the customer wants to buy.
"Being in Stoke, we can stop things quickly that the customer\’s not buying, and change. You couldn\’t do that if it was thousands of miles away in China." So why did everybody else go to China? "Lemmings!" she said (it was the only printable part of her answer.)
This is part of the answer as to why China\’s not going to end up manufacturing everything. "Clustering" and economic geography still matter. If you\’ve got a skilled workforce, which Stoke does indeed have, then it can be cheaper to go to where those skills are rather than train up new people….at almost whatever wage rate. There\’s also all of the ancillary skills available. In terms of potteries (about which I know nothing) we might talk about all of the support services like kiln building and maintenance, supply of glazes, of raw materials, as well as the fact that there\’s a huge reserve of skill and talent in the town.
Just as an example, despite the fact that the steel industry has left Sheffield, it\’s still the centre of the steel support industry. Still the centre for ferro-alloys. Because that\’s where the people who know how to make them are.
In essence, we\’re talking about total productivity rather than just labour rate or labour productivity.
As to the second part, about changing production in response to consumer demand. A few years ago my next door neighbours ran a swimwear manufacturing consultancy. I recall asking why they were in Portugal? Surely, all this was made in China, or Mauritius, or Lesotho or somewhere?
Well, yes and no. The basic orders for the season were indeed made in such places. But when they saw what was selling, when they saw what needed to be restocked, then they turned to the factories in Portugal and Spain. For turnaround times (including the all important transport times) were, at the expense of higher wages rates, much lower, enabling them to restock fashionable items while they were still fashionable, still this season\’s. Thus the Portuguese are adding the flexible part to the basic mass production that is done in cheaper parts of the world.
It just ain\’t all about wage rates, which is why we\’re not going to see the disappearance of even textile manufacturing, or potteries, from the high wage world.