1970 or 2070 – which should our industrial policy aim for?

In 1970, Ian and I were still at school. The Vietnam war was raging. The first transatlantic flight by a Boeing 747 ushered in a new era of air travel; Concorde’s first supersonic flight did not. The Beatles launched Let it Be, and split up; and against the odds, the Apollo 13 crew made it back to earth. The Scottish steel industry was making steel as if there was no tomorrow – and sadly, for that industry, there was indeed no tomorrow.

In a thought-provoking article in the London review of books, James Meek asks ‘who holds the welding rod?’  He describes in some detail the melancholy series of events surrounding the Campbelltown steel fabrication facility, the attempt to create sustainable jobs in Campbelltown manufacturing wind turbine towers. Ultimately, it failed. What went wrong? 

The bald truth is that European businesses can’t compete in a market where Asian sweatshops are better as well as cheaper. As anyone knows who has visited a modern car factory, welding is a job for robots nowadays. Scotland can only succeed by doing innovative high tech high value-added work: creating and protecting and exploiting cutting edge intellectual property, and investing in the quality and tooling to be able to compete with the best in the world; not sitting at the bottom of the commodity part of the supply chain where contracts are decided largely on price, and whoever has the biggest throughput and market share has the most competitive offer. Think about it – in 1970, Scottish workers were welding while Vietnamese workers were fighting. 50 years later, Vietnamese workers have replaced AK47s with welding torches. Surely that’s better for everyone! Vietnam has moved on and is now doing the welding. Scotland must move on as well, to direct our skills and industrial investment to the rising stars of the future, not failed attempts to preserve the fading glories of the past.

But steelwork is important, you say, even strategic. Ok, if it is, what does that mean? First, the Government would have to formally declare it as a strategic industry. Then, take measures to secure the whole supply chain, from ore to best possible end product – by best possible we mean the right combination of quality, delivery and price for each market. And then, use the exemption from free trade rules for strategic industries to direct procurement so that all steelwork of certain categories is procured locally, to allow the industry to achieve critical mass. And the industry would have to step up to the plate: to benchmark itself and invest to compete successfully against the best in the world – and not just where the best in the world is now, but where it’s going to be in five or ten or twenty years’ time.

“That sounds like hard work!” you say. Well, yes… there are no shortcuts. Most people miss opportunities because they come dressed in overalls and look like work. “It’s probably not worth it, looking at the way the international steel market is going.” Ah, now you’re beginning to get the point! “So what should we be spending our limited resources on?” Good, we say, that’s the conversation we want to have!