Subject: British Steel - the migration of manufacturing out of advanced countries
23 May 2019


British Steel has suffered from one of the most basic trends which operated in the 1900s - the migration of manufacturing to more appropriate parts of the world. The position of raw materials, the education and pay of workforces has meant that basic manufacturing can be done more cheaply in less developed parts of the world, with the technology level rising all the time. Local initiatives have put pressure on such advance world activities, and whole industries have been affected.

The advanced world has however driven this trend to form a completely different trading pattern - the Multi-National Corporation (MNC). The industries which have survived in the advanced world are those where firms have sited their manufacturing in the most appropriate parts of the world, relevant to raw materials, skill levels available, and the nature of products required. Thus an increasing share of investment in counties like the UK goes overseas, and for several decades now a majority of company profits arises from overseas. MNCs provide technology, know-how and marketing to less developed countries - and in many cases are the only way that these countries can grow. A vibrant MNC network forms round the world in these successful industries - though those that get into the news are those who do not form a MNC network - such as Steel.

The British Steel Corporation was formed by the Labour Government after WW2 by buying up around a dozen successful steel companies at the top of the industry. Putting them into one Corporation violated basic rules - which would not have been allowed for any private companies - competition produces increased effeciency and innovation. The British Steel Corporation did nothing innovative - by the time it was privatised by Mrs T it was found to have over twice the steel making capacity that it ever expected to sell - itself a gross waste of resources. If the 1940s steel companies had remained independent we could have expected several of them to have seen the dangers and opportunities of steel making in suitable less developed counties - and formed vibrant MNC networks, while developing the next high technology in this industry. Incompetent interfering governments have done vast damage to our economy, cutting the next stages of development. 'New World Trading Patterns, Scenarios from the Business Trends Library',, Email: Email

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