The Current Situation Facing the British Steel Industry
This report aims to critically analyse and evaluate the current situation facing the British Steel Industry using contemporary information and a combination of theories such as ‘The International Product Life Cycle’ and ‘Porter’s Diamond of National Advantage’.
Steel is a vital material in the process of economic expansion and it has been very important for the society, considering that the level of consumption of steel/ capita can be used as an index of the level of social wealth, political and economic stability. The steel industry is closely linked with numerous industrial sectors and it promotes the innovation, growth and employment of the European member states. Although the EU is the second largest producer of steel in the world after China its goal is to increase the market share of GDP by 20% in 2020.
The British Steel industry is necessary tool, without which, the manufacturing success would not have happened. In 1972, the steel production level has reached an all-time peak of 28 Mt (million tonnes) per year and offered more than twice as many jobs as it does now. Referencing back to Michael Porter’s Book, ‘The Competitive Advantage of Nations ‘, in year 1945, there were 50 mills of steel all throughout UK and it has been reduced to 7 in 1970. Following this, the decision to privatise the British Steel Industry was taken by Margaret Thatcher in 1988, however, since 1990, the real value of the industry has fallen by 24% and it does not seem to be getting better.
Following the Financial Crisis of 2008, the production of British Steel decreased to less than 10mt/year and suffered a gradual decline until 2015 where it has increased slightly to 12mt, creating a ‘national steel crisis’. (Office of National Statistics)