Manufacturing renaissance in industrial regions? Investigating the potential of advanced manufacturing for sectoral and spatial rebalancing.

Lead Research Organisation: University of Southampton
Department Name: Sch of Geography & Environmental Sci


The recession from 2008, and the persistent sectoral and spatial imbalances in the recovery, have provoked political calls to 'rebalance' the economy. According to Government representatives, Britain needs to 'reindustrialise', to rediscover its talent for manufacturing. Strengthening manufacturing in the Midlands and North will aid economic stability, raise productivity, and promote a more even distribution of growth. It has been argued that traditional industrial regions should develop new types of high-technology, 'advanced' manufacturing activities.

Such calls for rebalancing have triggered a major debate on whether the British economy can in any way 're-industrialise'. Optimists point to resurgent clusters of manufacturing industries. Others are sceptical and argue that British manufacturing has been undermined by the 2008 recession, long-term weaknesses and an unsupportive institutional context. In this view, supply chains in British manufacturing are now too thin, fragmented and sparse to support industrial renewal on the scale required. There is evidence to show uneven regional trends in manufacturing, especially between the North and South of Britain and, according to some, advanced manufacturing is growing at a much faster rate in Southern England due to its research intensity and proximity to high-technology institutions. There is a pressing need to know how, and how far, industrial regions in Britain are developing advanced manufacturing.

Relatively little is known about any potential regional manufacturing renaissance and the significance of location. There are several hypotheses. Some argue that advanced manufacturing develops best in specialised clusters and in local 'ecosystems' in which firms benefit from shared capabilities, resources, spill-overs and intermediaries. Others emphasise broader-scale external economies across sectors, so that location in cities and regions with a wide range of growing industries is more important to manufacturing performance. There is also debate about the degree to which location in traditional industrial regions aids or hinders advanced manufacturing. In a 'phoenix industry' view, manufacturing can be revived in traditional industrial regions by networks of small firms and by the diversification and branching of new sectors. This project tackles these questions. It places the performance of advanced manufacturing firms in the context of changes in supply chains and examines whether there is increasing specialisation of regions and locations in particular tasks, roles and functions rather than in entire industries.

This project will examine the geographical, organisational and economic dynamics of four key manufacturing industries: electrical, computing and optical equipment; aerospace; pharmaceuticals; and motor vehicles. The project would proceed in three connected stages. The first stage would be to use and combine existing micro-data sources to examine the central issues on the relationships between manufacturing performance and location and investigate the key determinants of firm growth, performance and innovation in these industries. The project will use and combine several data-sets to provide a detailed analysis of change since the early 1970s. The second stage of the project will carry out a postal and online survey of firms in the four industries. This will explore the relationships between location and firm performance in more depth. For each industry, the survey aims to compare a set of firms within traditional industrial regions (in the North, Wales, Scotland or Midlands) with a similar group of firms in Southern regions. The final stage of the project will focus on manufacturers in these industries in four Midlands/Northern regions (selecting one region where each industry is well represented). In these areas, it will use firm interviews and focus groups to discuss findings, and identify and sound out key policy lessons and implications.

Planned Impact

Rebalancing the British economy, both in industrial and geographical terms is a central economic agenda. Some degree of manufacturing renaissance based on the growth of advanced manufacturing in the regions is integral to this agenda. The project will examine the geographical dynamics and processes of change in four key manufacturing industries. It will examine the condition and performance of advanced manufacturing in different regions across Britain and provide evidence to inform the development of relevant policies and strategies. The impact strategy aims to raise awareness of the research, develop key stakeholder engagement, and deliver impact through beneficial knowledge exchange with firms, industry representatives and policy-makers nationally, within the devolved territories, and city-regions and LEP areas. The proposal has been reviewed and shaped by critical comments and advice from potential users.

The principal non-academic beneficiaries will be:
i. Public policy makers at both national and sub-national scales. It would assist local and central government to understand more about the causes of advanced manufacturing growth and productivity in different regions in Britain, and the implications for policy. The project would provide a valuable input to debates about the best design of regionally-sensitive industrial policy and the possible role of more place-based policies. It will be of use to city councils, Combined Authorities, Local Enterprise Partnerships, urban regeneration agencies, training providers, the Northern Way, Midlands Engine and other emergent 'powerhouse' and 'engine' organisations, national government departments, devolved administrations, and House of Commons and Lords Select Committees as well as think-tanks including the Centre for Cities.
ii. Firms and representative and industry/sectoral associations would gain further knowledge of changing trends in their industries, changes to supply chains, and the significance of location, agglomeration and spatial distributions with a view to shaping their strategies for innovation, productivity improvement and competitiveness. It would provide evidence on the needs and requirements of firms in these industries. It would increase public and industry knowledge about changes in manufacturing in different areas and lead to a better-informed assessment of the probable futures of these industries.
iii. Public and private partnerships and agencies/ consultants engaged in supporting and enabling advanced manufacturing growth would be provided with useful knowledge. The project would be of benefit to those engaged local, regional and urban economic development and responsible for the planning the supply of human capital and infrastructure investment. See letter of support from RTPI.
iv. International economic and industrial development institutions. There is also much interest in other countries in understanding more about the factors that determine the regeneration of old industrial regions and how advanced manufacturing can be nurtured and supported. The agenda is prominent in ILO, UNIDO, OECD and European Commission policy concerns. Funding of this project would facilitate future comparative international research and the investigators would be looking to develop an international programme of research on this topic.

The strategy will be delivered through the following activities: 1. User and beneficiary policy community building through development of research networks, including a dedicated website connected with a blog, Twitter feed, LinkedIn group; 2. Interim workshops bringing together academics, policy makers and industry representatives to present findings for comment and feedback; 3. Project Advisory Group meetings to advise and steer the impact strategy including academics and practitioners; 4. Policy reports and 3 (non-technical) summary documents and policy briefings 5. A conference combining both academic and policy communities.


10 25 50
Description One Bank research seminar 13 December 2018 John Moffat 'The impact of clustering on total factor productivity in Great Britain' 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact One Bank Research Seminar - 'The impact of clustering on total factor productivity in Great Britain' the presentation sparked discussions and questions from Bank of England staff and other stakeholders and helped to build practitioner economists' knowledge of the project and its findings.
Year(s) Of Engagement Activity 2018
Description Policy Bref - Advanced manufacturing and local industrial strategies 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact A policy briefing based on early results and data from the project was sent to all LEPS via the LEP Network.
Year(s) Of Engagement Activity 2019