Post-Covid shift away from global supply chains could boost North Wales economy
A backlash against globalisation in the wake of the Covid-19 crisis can kick-start North Wales鈥檚 powerful manufacturing sector with a boom in cutting edge technologies like 3D printing boosting the recovery, according to a top expert.
Dr Edward Jones黑料不打烊 economics lecturer Dr Edward Jones, predicts more businesses and governments will want to have their supplies closer to home as they emerge from months of unprecedented lockdown.
Dr Jones, who works in the university鈥檚 renowned Business School, says the industrial heritage of North Wales may make it perfectly placed to take advantage of the rapidly evolving Fourth Industrial Revolution technologies as the nation and the world takes on a new shape.
These include Artificial Intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.
He said: 鈥淚t is the fusion of these technologies and their interaction across the physical, digital and biological domains that makes this industrial revolution different from those previously seen.
鈥淎nalysis by 黑料不打烊 Business School has shown that the manufacturing clusters in North Wales are among the most competitive in Britain at creating new manufacturing jobs.
鈥淲e could find that this past knowhow and experience works to our advantage as we come out of the pandemic induced economic crisis to embrace these new technologies.
鈥淭he appropriate manufacturing skills, knowledge, experience and culture are already strong in North Wales and could therefore adapt to activities being brought home as part of the drive for self-reliance. The shift away from global supply chains could be the catalyst to grow the manufacturing sector and drive the North Wales economy forward.
鈥淥nly eight per cent of the British workforce was employed in manufacturing in 2018, compared with 11 percent in Wales. But in North Wales, this proportion was even higher at 14 percent and has been consistently at this level for the past few years. This puts us in a stronger position.鈥�
Dr Jones expects many Western governments and companies to put the brakes on decades of globalisation and pull back from outsourcing supply chains and customer services to providers thousands of miles away.
Instead he believes there will be a sea change as UK-based company owners seek out more self-reliant production processes, either in-house or geographically closer to their core businesses.
He envisages many may also turn to technology developed as part of the Fourth Industrial Revolution, such as 3D printer production methods which were exemplified by a recent community project in Wrexham which saw more than a thousand protective visors for NHS frontline staff produced on 3D printers, set up at a school. There are other 3D manufacturing centres across the region, including M-SParc, 黑料不打烊, Caernarfon, Rhyl and Deeside.
Dr Jones said: 鈥淭he region is better placed than many to rebound from the economic impact experienced in the wake of the Coronavirus pandemic.
鈥淣orth Wales could even help herald a new era of manufacturing as it is already in a very strong position in terms of its manufacturing base.鈥�
He pointed to the long tradition of manufacturing industries based in the region, the legacy of which is that it still has vital resources and a workforce armed with the inherent skills needed to meet any future demand for more local production hubs.
鈥淐ombine this with North Wales having embraced new technologies, such as 3D printer production processes, and it is in a prime position to move forwards as pandemic conditions improve,鈥� he said.
Dr Jones added: 鈥淒uring the national emergency we have already witnessed a mini boom in 3D printing technology with some manufacturers in this field being urged to produce vital personal protective equipment for key workers.
鈥淭his is a significant move which has put the spotlight on 3D printing technology. Before the pandemic we were only really at the outer edges of 3D printing production capacity but now I think we鈥檒l see much higher demand for this revolutionary system in a whole range of different spheres.鈥�
He said North Wales is lucky to have leaders in the field based on home turf, adding: 鈥淚 think in the months and years ahead we will really see this technology come into its own.鈥�
He voiced his views on the back of work carried out over recent months to shape what comes next for the Welsh economy in a post-Covid-19 world.
Economists have been working with epidemiologists to develop economic forecasts, which highlight the relationship between our future economic prosperity and its success in tackling the virus.
Dr Jones said: 鈥淯nfortunately, there is much we don鈥檛 know about this novel coronavirus and this makes the task of predicting the direction of the economy very difficult.鈥�
He conceded there will be hurdles and setbacks as the region and the nation work to overcome the downturn, especially given that The Economist magazine recently predicted world goods trade may fall by 10 to 30 per cent this year.
But he said there are reasons for optimism and it is important not to fall into the trap of expecting the future to be all doom with no bright spots on the horizon.
He added: 鈥淚n recent decades the rest of Britain has seen a decline in manufacturing activities, but the same cannot be said about North Wales.
Using Business Register and Employment Survey data between 2015 and 2018, research by Dr Jones has shown that North Wales regions are among the most competitive in the UK at creating manufacturing jobs. Flintshire is in the top 20% of UK regions in terms of its competitiveness.
He said: 鈥淥ne thing that is certain is that globalisation 鈥� the process by which the world becomes increasingly interconnected as a result of massively increased trade between nations 鈥� is in trouble.
鈥淒uring the era of hyper-globalisation between 1990 and 2008 firms organised production using global value chains: relocating production to low wage countries. China became the world factory and borders opened to people, goods, and capital and information.
鈥淗owever, the open system of trade that had dominated the world economy for decades was already damaged by the 2008 financial crisis and the China鈥揢nited States trade war.
鈥淕lobalisation is now reeling from its third body blow as lockdowns have sealed borders and disrupted commerce. Factories and shop closures have caused demand to tumble and prevented suppliers from reaching customers. The damage has not been universal but the overall effect is savage.
鈥淎s economies re-open, activities will recover but we shouldn鈥檛 expect a quick return to a care-free world with unfettered movement and free trade. We鈥檙e likely to be living with Covid-19 for a long time, and the economy of the future will need to reflect that.
鈥淎round the world, public opinion is shifting away from globalisation. People have been disturbed to find that their health depends on a brawl to import protective equipment, and on the migrant workers who work in care homes and harvest crops.
鈥淎 situation where Western countries were queuing up to outbid each other for Chinese PPE equipment will never be allowed to happen again.
鈥淭he push to bring supply chains back home in the name of resilience is accelerating. The race for economic self-reliance has begun.鈥�
He predicts that world supply chains will truncate dramatically, become less extensive, and much closer to home 鈥� an interesting opportunity for Wales and the North in particular with its history of developing industrial clusters which have helped see it through difficult times in the past.
Publication date: 9 July 2020