Written by Paul Balmer, Director of Engineering, Siemens VAI:
There is little doubt that the UK economy is experiencing a period of great change, with increased globalisation continuing to present significant challenges for the future of many of our traditional industries.

The manufacturing and engineering sectors for example, are already facing fierce competition from abroad, with many UK businesses struggling to survive under the increased pressure.

In recent months, several larger firms have opted to relocate abroad in their essential drive to lower costs, with factory closures and job losses now becoming an all-too-common occurrence in UK industry.

Much of the fierce international competition that is currently facing the UK is coming from the low-cost economies of Asia and Eastern Europe, where cheap labour is readily available and businesses do not have to adhere to such strict environmental legislation.

These economies are driving down prices and intensifying the competition, as domestic firms are forced to price themselves out of the market or accept significant losses.

To an extent, we must now accept that some business will inevitably go abroad; it is simply a fact of life. This may initially be painful, but we must not overestimate the scale of the problem and instead should realistically prepare for the future ahead.

With this in mind, the Tees Valley Engineering Partnership has produced an engineering strategy which outlines its vision for the sector until 2015. Working in partnership with a number of locally-based engineering companies, including Siemens VAI, the TVEP is now attempting to implement this strategy, to ensure that the Tees Valley remains a profitable engineering area in the longer-term.

We can excel collaboratively with the underlying message that there is a greater need than ever to differentiate ourselves from the competition. We will only achieve this with products that meet customer requirements at a price they can afford and justify. Companies like Siemens VAI are already working towards this goal by supporting research and development and utilising the latest design tools and techniques.

In line with assertions from the Secretary of State for Trade and Industry, Patricia Hewitt, the engineering industry must now simply raise its game. We cannot realistically compete with the low wages of other economies and we shouldn’t try to. Instead, we can work hard to update our skills, increase our technologies and make good use of the world class capability that exists here within the Tees Valley region.