Dr. Carlo Morelli Economic Studies, School of Business, University of Dundee, Dundee

1. Workshop on British and Japanese Enterprise, Cardiff University 8-9 August 2011 Jute, firm survival and British industrial policy: Government action under globalisation. Dr. Carlo Morelli Economic Studies, School of Business, University of Dundee, Dundee

2. The rise & decline of Dundee’s jute industry: A story of a staple industry?

3. Source: 1881-1961: A. Carstairs, ‘The nature and diversification of employment in Dundee’ in S. Jones (ed), Dundee and District (Dundee, 1968), pp. 320, 328. Table 1 Proportion of Jute Workers in Total Working Population of Dundee 1881-1931

4. UK Government Working Party Report, 1948chaired by SJL Hardie the Director of British Oxygen Co. • falling demand & substitution effects • Domestic product market competition • increased international competition • geographical concentration • high local unemployment. • output levels of 247,000 tonnes of jute products and cloth • only 11,000 workers would be necessary.

5. Is the ‘staple industry’ story sufficient? • The two largest firms Low & Bonar and Jute Industries did not close and instead thrived. • The decline of the jute industry did not take place until the 1970s. • Government participation in the industry continued until the 1970s.

6. Debates within the UK Literature • UK relative economic decline Broadberry & Crafts (1996, 2001); Booth (2003) • Institutional failure and sclerosis Eichengreen (1996); Olson (1965, 1982) • Government & economic management Tomlinson (1996, 2009); Edgerton (2006)

7. 1945 to the 1970s renewed prosperity The prospects set out in the Working Party Report failed to materialise • Employment • No of firms • Output

8. Employment remained above the figures suggested by the Working Party Report until 1970

9. Number of establishments grew after 1948 and remained above the 1948 level until 1970

10. Real Gross Output grew continuously from 1948 to 1970

11. Methods of Protection & Collusion in Dundee jute industry • Government control through Jute Control & State Trading established 1939, not ruled illegal by the Restrictive Trade Practices Court in 1963 • Entry limited through quota imports on raw jute via special licences to 110 quota holders • Prices “equated” along with Dundee prices through agreement with industry and Board of Trade accountants • Seven collusive pricing agreements Gentleman’s Agreement Yarn Prices Gentleman’s Agreement Cloth Prices.

12. Modernisation in the Dundee jute industry • Introduction of modern spinning equipment • Double shift working • Replacement of female workers with male workers • Early introduction of job evaluation

13. A declining female workforce. Men become a majority of the workforce by the early 1960s

14. Job Evaluation introduced in 1954

15. Firm’s response to declining markets (1) Specialisation: Higher quality & protected product markets

16. Firm’s response to declining markets (2) • Related Diversification: Polypropelyene and artificial fibres 1966 Polytape Ltd & Synthetic Fibres (Scotland) Ltd. Low & Bonar – related global textile markets Disposable & non disposable yarns

17. Firm’s response to declining markets (3) • Unrelated Diversification Low & Bonar – engineering Jute Industries – oil & services with a UK focus 1971 Sidlaw Industries 1972 Aberdeen Service Company Grampian Developments Ltd.

18. Jute Industries & Low & Bonar today • Sidlaw Industries sold to Danisco in 1996 a major Copenhagen based industrial packaging business and in 2011 became part of Du Pont • Low & Bonar remains a textile manufacturer

19. Conclusions • Relative economic decline vs economic transformation • Firms as agents. Responding to signals • Management of decline contrasting periods; Continuing role of industrial policy under globalisation