The Quality of Manufactured Products in Britain and Germany

This paper is concerned with the relation between workforce skills and high-quality production. Detailed investigations of specific products sampled from three industries indicate that the average British-made product embodied fewer quality-features than its German-made counterpart, and that Britain produces little of top-quality grades—in contrast to a strong German presence at that end of the market. These findings were based on factory visits and discussions with trade experts in both countries. Two broad aspects of workforce skills which contribute to higher-quality production were identified: (1) the skills relevant at the design-interface between consumer demand and production realities, and (2) the skills relevant to small and medium-sized batch-production of specialised varieties. Existing comparisons based on official statistics of production and prices do not take adequate account of differences in product-quality. Based on a close matching of quality-grades of ten sampled products, proper adjustment for quality differences across countries would substantially increase estimates of the German real productivity advantage in manufacturing (to around 50% over Britain), and raise estimates of real income per head for Germany to some 40% over Britain.