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Last Updated: Friday, 23 January, 2004, 16:09 GMT
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Uncertainty over the Euro and a competition from low-wage countries are partly to blame for recent job losses in the Welsh manufacturing industry, according to an economic expert.

And the proposed jobs losses at Panasonic in Pentwyn which emerged on Friday, has fuelled fears there is a pattern emerging - and one that will be hard to overcome.

"This latest news from Panasonic does form part of a pattern and what I detect as a thread through this is that the electronics industry needs to re-equip," said Dr Charles Smith, senior lecturer at Swansea Business School.

Unlike other regions like Catalonia we haven't attracted inward investment of head office status, decisions are made in Detroit or Tokyo and Wales doesn't get involved in those decisions
Dr Charles Smith

"The sort of things people want are different now - such as the widescreen televisions. The old cathode ray tube is on its way out."

The question mark over whether or not the UK will join the euro has cast its shadow, he said.

"On the continent the fact that the UK is not in the Euro is one of the stumbling blocks," explained.

"The Euro makes it easier but it is not the only solution - there's the fact that ten low-wage countries are coming into the EU quite soon.

"The exchange rate movement is an extra element of uncertainty and interest rates are one per cent higher here than in the euro zone."

Close competition

Dr Smith said companies looking to invest do not have to search far to find competitive labour markets.

"There are opportunities closer to Euro markets.

"In fact in terms of the Euro markets, 10 new companies are joining in May this year and five or six over the next few years - places like Poland and Hungary would be candidates."

Dr Smith said there needs to be a much more pro-active manufacturing strategy.

"In London and the south east there is a much bigger commitment to the financial and private services.

There's no doubt employment has been declining and will continue to decline in manufacturing
Professor James Foreman-Peck

"Unlike other regions like Catalonia we haven't attracted inward investment of head office status, decisions are made in Detroit or Tokyo and Wales doesn't get involved in those decisions - it is out of Welsh hands, like the euro.

"With hi-tech manufacturing there is a constant need to re-equip."

Another expert, Dr James Foreman-Peck, professor of economics and the director of newly-formed Welsh Institute for Research in Economics and Development said bad news will continue.

"There's no doubt employment has been declining and will continue to decline in manufacturing," he said.

"We have got to be able to do something that they can't do in Shanghai or Bangalore."

But Dr Foreman-Peck said total employment in Wales has been looking quite healthy compared to that of the south east.

And he said although jobs losses hit the headlines, small amounts of job-creation do not attract the same kind of publicity.




SEE ALSO:
MP seeks talks over job losses
19 Oct 00  |  Wales


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