Business Tech

The Future of the Steel Industry Amidst Market Changes

A wind of change has swept across the global steel industry. It has been forced to contend with excessive supply, a flat-lining marketplace, loss of jobs, plant closures and rising cost of climate change policies, amongst other things.

Countries have taken various approaches to tackle these problems, and they have led to the different outcomes of their steel industries. Today, the challenge for the UK industry- and the government- is to figure a way to move forward in this highly unstable environment.

Researchers form University of Leeds Business School’s Centre for Employment Relations, Innovation and Change (CEIRIC), have been studying the world of steel for several years. While this research is mainly from the angle of employment relations. It also covers the bigger social influence of the rearrangement and consolidation of the steel industry, CSR (Corporate Social Responsibility) and the likelihood of Socially Responsible Restructuring.

The Government Strategy

The steel industry is, par excellence, global by nature. Modern consolidation of the industry, though driven by the strategic decisions of multinational firms, also shows how much nation states have tried to intervene in the coordination of markets. It is necessary to understand these dynamics and characteristics before the country’s steel development strategy can be performed.

It is surprising is several respects, that a strategy for the industry is being considered in the UK, instead of the usual way the UK government has approached running the overall economy.

Foundation Industries

Experts have categorised the steel industry as a “Foundation Industry”. This is because it strengthens the web of strategically important construction and manufacturing supply chains. The output is mainly for input into the supply chain instead of ultimate consumption.

Hence, foundation industries are useful for generating fundamental value for an economy and the provision of infrastructure via which skills, research and development, as well as innovation are developed.

It remains to be determined, how the result of current Brexit negotiations will impact the steel industry and its uncertain future.

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