This post is an extract of my forthcoming book on business model innovation. The innovation book looks at why business model innovation is needed and how it works. You can read more about it here. These posts are early drafts of planned content and I’m putting them out to get feedback. Please do comment below, or subscribe to these pages to get each new section as it is published. In today’s post, we will be looking at what was special about Birmingham and why it’s commecial exceptionalism was brief
What was special about Birmingham anyway?
Today when I ask colleagues, clients and students where the best places for business are in the world they usually give me one of three answers depending on their interests. The three cities are: London if they are into finance; San Francisco if they are into tech, Shenzen if they are into any sort of manufactured products.
Years ago I went to another great business city. Brugge. Have you ever heard of it? It’s in Belgium. For hundreds of years it dominated the wool and cloth trade. I left my hotel and walked into the town’s square. I was amazed. The architecture and history were every bit as powerful as the North Italian cities that I had visited. Beautiful golden stone. Carved windows, little statues preaching theological or commercial messages from the rooftops.
As you can imagine, we don’t put gargoyles on modern buildings, Brugge’s glory days lay over 700 years in the past. It had made it’s money from importing wool from poor sheep farmers in England, turning it into cloth and then selling it across Europe. A powerful business model. The Belgian merchants were excellent at this and they made vast amounts of money from their trade and manufacturing.
In their success lay the seeds of disaster. As everyone made money from the trade the English were able to invest in their fields and farms. The sheep were better fed and perversely the quality of the wool changed. It became far less suitable. The wool trade slowly died and Brugge was left behind. Its glorious townhouses a testament to a rich, but rapidly fading past.
Birmingham tells a similar tale.
The industrial revolution started 30 miles to the north west in Coalbrookdale, in Shropshire. In 1707 we figured out how to make cast iron at scale, a few years later Boulton and Watt and Murdoch were creating steam engines. Adam smith started talking about how efficiently machines could make pins and nails through the allocation of labour. Birmingham just seemed to be in tthe right place.
It was close to coal and Iron. There were plenty of people to fill the factories – coming in from the rich farmlands of the midlands and there were rivers, then canals, and railways which could quickly and cheaply take the finished products to London and the ports.
Birmingham became the workshop of the world. At the turn of the 20th century a significant proportion of ALL the world’s manufactured good were made there. It was a city of factories, of workers and of smoke. It bustled with energy and many of Britain’s social contributions came from there in the form of the Cadbury’s and Rowntrees. Capitalists with a human heart who sought to ameliorate some of the horrors of the industrial lifestyle.
It’s hard now to think of any significant manufacturing in the city. There is a Jewelry quarter. There are some specialist manufacturing companies left. The great factories – Dunlop , Rover, BSA have long been closed. Their sites have been turned into retail parks or housing developments.
Why did Birmingham die as the beating manufacturing heart of England? There are a number of reasons – the wanton destruction of capital in two world wars. The incompetence of generations of manufacturing leadership, the crisis of confidence with the loss of empire, the lack of investment.
Does it matter?
When my Dad retired he sold the company to a customer. After a few years it was quickly absorbed into their manufacturing facilities. The building was sold. The staff made redundant or allowed early retirement. The machines replaced. Birmingham took another step away from its industrial past. The business model of the city – making things for the world – was well and truly dead.
This book isn’t a history of Birmingham, or indeed of any city.
It’s a story of why London, San Francisco and Shenzen are doomed to face the same fate as Birmingham and Brugge.
It’s a story of why the tens of thousands of finance companies in London will lead that city into obscurity.
It’s a story of how technology will leave San Francisco and why one day Sands Road and Mountain View will be museums of a kind. Interetsing but no longer really relevant.
It’s a story of how the millions of factories in Shenzen and the Pearl River Delta will be boarded up, ripped down. Why Foxconn and the nameless factories that satisfy our every need on Amazon Prime are ultimately doomed.
Let me tell you how I got the first inkling of what was going to happen
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