Everything’s changing – how can why is manufacturing in different countries changing?
Manufacturing has declined in importance in some regions, while it has become more significant in other. In many of the richest areas of the world manufacturing has declined. For example in Britain the number of people employed in manufacturing fell from just over 6 million in 1981 to 3.5 million in 2003. This is is a result of de-industrialisation and mechanisation (machines replacing people).
Reasons for changes:
There are many reasons why some area have experienced growth in manufacturing industry whereas others have suffered a decline.
This can take many forms such as:
setting up areas (assisted areas/enterprise zones) where conditions are favourable for new industry
providing advanced factories of various sizes
offering retraining and removal expenses
ensuring educational reform is high on the list in areas such as the four Asian ‘tigers’
Some countries have a minimum wage. In the UK, this is £5.93 for those aged 22 years or older, but in Sri Lanka garment workers are often paid a fraction of a much lower minimum wage. An EU directive limits the maximum number of hours worked per week to 48 ( except in the UK) The average South Korean works 2,390 hours a year in contrast to 1,652 in UK. This has real implications for production. In Sri Lanka, garment workers should not work after 10pm due to International Labour Organisation rules, but they are
often forced to do so by their employers.
Health and safety regulations
Working conditions tend to vary globally. In the UK, adult employees working over six hours are entitled to a 20-minute break. Workers have the right to:
know how to do their job safely and to be trained to do so
know how to get first aid
know what to do in an emergency
be supplied with protective clothing
Such regulations often do not exist in some poorer countries or are not enforced. Some workers – unable to travel home after a shift and arrive back on time for the next shift – sleep on the factory floor, although this is illegal.
Prohibition of strikes
In the 1970s, there was much unrest in the UK and various trade unions frequently called strikes. The so-called ‘winter of discontent’ began with strike action by 15,000 Ford workers in September 1978. There were many groups that joined in and power cuts became the norm. Such disruption had an adverse effect on manufacturing industry and led to the reduction of the power of the trade unions. Companies such as Nissan and Toyota only came to the UK on the understanding that strike action would not be
allowed. This is also true of many newly industrialising countries (NICs). Trade unions are allowed in Sri Lanka, but workers are likely to be threatened if they join one.
Tax incentives and tax-free zones
Tax incentives take a variety of forms, but all seek to offset costs. For example, One NorthEast (the development agency responsible for the north-east of England) offers job creation grants, business rate or rent-free period and help in preparing a business plan while the government gives a grant towards the cost. Tax-free zones are designated as free from the paying of tax and include zones such as areas of Dubai and Zambia.