Economy of Scotland - Manufacturing

Manufacturing

Scotland's heavy industry began to develop in the second half of the 18th century. The Carron Company established its ironworks at Falkirk in 1759, initially using imported ore but later using locally sourced Ironstone.The iron industry expanded tenfold between 1830 and 1844. The shipbuilding industry on the River Clyde increased greatly from the 1840s and by 1870 the Clyde was producing more than half of Britain's tonnage of shipping. The heavy industries based around shipbuilding and locomotives went into severe decline after World War II.

Manufacturing in Scotland has shifted its focus in recent years with heavy industries such as shipbuilding and iron and steel declining in their importance and contribution to the economy. It is generally argued that this has been in response to increasing globalisation and competition from low cost producers across the world, which has eroded Scotland's comparative advantage in such industries over the later half of the 20th century. However, the decline in heavy industry in Scotland has been supplanted with the rise in the manufacture of lighter, less labour intensive products such as optoelectronics, software, chemical products and derivatives as well as life sciences. The Engineering and Defence sectors employ around 30,000 people in Scotland. The principal companies operating in the sector include; BAE Systems, Rolls-Royce, Raytheon, Alexander Dennis, Thales, Selex Galileo and Babcock. The decline of heavy industry resulted in a sectoral shift of labour. This has led to smaller firms strengthening links with the academic community and substantial, industry-specific retraining programmes for the workforce.