THE OUTSOURCING MYTH

For years MBAs have been preaching the virtues of outsourcing. But the Asian temptress has started getting a bit expensive with wages going up currently in China by well over 20% a year.

Alix Partners, the global consulting firm, said in the Economist in March that if China's currency and shipping costs were to rise by 5% annually and wages were to go up by 30% a year, by 2015 it would be just as cheap to make things in North America as to make them in China and ship them there.

Trouble is the jobs and skills have been largely turned off in the States as not needed.

They will be soon.

But this week I saw some good news from Stoke-on-Trent. Burleigh Pottery is alive and well at last and across Staffordshire, pottery businesses are beginning to revive. Businesses like Emma Bridgewater whose owner laments the outsourcing trend which led to losing touch with buyers, customers and quality control.

A few years ago I was talking to a Chinese apparatchik from Sichuan who confessed that Chinese quality was a problem. He said workers set off focused but then got bored and standards slipped. In fact in China the trick has been increasingly to invest in state of the art machinery not skilled labour and this by definition levels the cost playing field. But the potential plus that manufacturing here has is the existence still of some skilled workers.

Look at the automotive business in the UK. Look especially at the triumph at Jaguar given proper levels of investment in plant.

The flight from manufacture came in part from a generation of graduates and MBAs who preferred spread sheets to factories and who, quite simply didn’t want to get their hands dirty. The ideology went rather further than that. Provenance of manufacturer was judged unimportant or an issue for marketing to solve. Why should champagne come from Epernay (or even from France) or whisky from Scotland or our organic food from Britain or anything from here apart from apps and computer games?

It may very seductive to hear our future lies in the knowledge economy and that farming, manufacture and added-value-stuff are redundant to our needs but it isn’t true.

The moment of truth is approaching.

Making stuff matters and where it’s made matters too.

Alfred Brown makers of worsted cloth from Leeds are more and more visible in M&S and Charles Tyrwhitt.

From Brown to Bridgewater Britain is changing.