Upload
feivel
View
41
Download
2
Tags:
Embed Size (px)
DESCRIPTION
Workshop on British and Japanese Enterprise, Cardiff University 8-9 August 2011. Jute, firm survival and British industrial policy: Government action under globalisation. Dr. Carlo Morelli Economic Studies, School of Business, University of Dundee, Dundee. - PowerPoint PPT Presentation
Citation preview
Dr. Carlo MorelliEconomic Studies, School of Business,
University of Dundee, Dundee
Jute, firm survival and British industrial policy:
Government action under globalisation.
Workshop on British and Japanese Enterprise,Cardiff University 8-9 August 2011
The rise & decline of Dundee’s jute industry: A story of a staple industry?
Source: 1881-1961: A. Carstairs, ‘The nature and diversification of employment in Dundee’ in S. Jones (ed), Dundee and District (Dundee, 1968), pp. 320, 328.
Table 1 Proportion of Jute Workers in Total Working Population of Dundee 1881-1931
1881 49
1891 48
1931 41
UK Government Working Party Report, 1948
chaired by SJL Hardie the Director of British Oxygen Co.
falling demand & substitution effects Domestic product market competition increased international competition geographical concentration high local unemployment.
output levels of 247,000 tonnes of jute products and cloth only 11,000 workers would be necessary.
Is the ‘staple industry’ story sufficient? The two largest firms Low & Bonar and
Jute Industries did not close and instead thrived.
The decline of the jute industry did not take place until the 1970s.
Government participation in the industry continued until the 1970s.
Debates within the UK Literature
UK relative economic decline
Broadberry & Crafts (1996, 2001); Booth (2003)
Institutional failure and sclerosis
Eichengreen (1996); Olson (1965, 1982) Government & economic management
Tomlinson (1996, 2009); Edgerton (2006)
1945 to the 1970s renewed prosperity
The prospects set out in the Working Party Report failed to materialise
Employment No of firms Output
Employment remained above the figures suggested by the Working Party Report until 1970
Number of establishments grew after 1948 and remained above the 1948 level until 1970
Real Gross Output grew continuously from 1948 to 1970
Methods of Protection & Collusion in Dundee jute industry
Government control through Jute Control & State Tradingestablished 1939, not ruled illegal by the Restrictive Trade Practices Court in 1963
Entry limited through quota imports on raw jute via special licences to 110 quota holders
Prices “equated” along with Dundee prices through agreement with industry and Board of Trade accountants
Seven collusive pricing agreementsGentleman’s Agreement Yarn Prices Gentleman’s Agreement Cloth Prices.
Modernisation in the Dundee jute industry
Introduction of modern spinning equipment Double shift working Replacement of female workers with male
workers Early introduction of job evaluation
A declining female workforce. Men become a majority of the workforce by the early 1960s
Job Evaluation introduced in 1954
35
40
45
50
55
60
65
70
75
1948
1949
1950
1951
1954
1958
1963
1968
1970
1971
1972
1973
1974
1975
1976
1977
1979
1980
1981
1982
1985
1986
1987
1988
1989
1990
1991
1992
Total Wages
Operatives
Source: UK Census of Production, 1951, 1958, 1963, 1968, 1971, 1972
Wages as a Percentage of Net Output
Specialisation: Higher quality & protected product markets
Category % of Jute Control’s sales
% of Dundee cloth production
Heavy bags sacking, woolpacks
15 -
Hessian cloth 60 5
‘Equated goods’ 25 40
‘Excluded goods’ - 55Source: McDowall S. and Draper P., (1978), Trade adjustment and the British jute
industry: a case study, derived from Board of Trade Journal, 16 Aug 1963.
Firm’s response to declining markets (1)
Firm’s response to declining markets (2) Related Diversification:
Polypropelyene and artificial fibres
1966 Polytape Ltd & Synthetic Fibres (Scotland) Ltd.
Low & Bonar – related global textile markets
Disposable & non disposable yarns
Firm’s response to declining markets (3) Unrelated Diversification
Low & Bonar – engineeringJute Industries – oil & services with a UK focus1971 Sidlaw Industries1972 Aberdeen Service Company
Grampian Developments Ltd.
Jute Industries & Low & Bonar today Sidlaw Industries sold to Danisco in 1996
a major Copenhagen based industrial packaging business and in 2011 became part of Du Pont
Low & Bonar remains a textile manufacturer
Conclusions
Relative economic decline vs economic transformation
Firms as agents. Responding to signals Management of decline contrasting periods;
Continuing role of industrial policy under globalisation