There is nothing technically sophisticated about small plastic tubes, no matter how impressive the machines that make them.For the rest of manufacturing, however, survival will depend on investing in new technology and finding new ways of working with it. Ten miles down the valley from the Helmshore museum lies Chadwicks, Britain's last producer of plastic drinking straws, among other things.The plant has the most up-to-the minute machinery there is for making straws, having made much of the workforce redundant during the past decade and a half. The business is still struggling against Chinese competition, which is far less technically advanced, very labour intensive and very low cost. Investment in new techniques is likely to be the only alternative for UK companies.For the cotton industry, which survives mainly in specialised and high- quality niches, it is too late It might be too late for other chunks of manufacturing, too. As Sir John Harvey-Jones has observed, they have energy and creativity but these qualities are spent on building a matchstick model of the Taj Mahal or dreaming that the pop group they have formed will be the next Oasis.It is, of course, even harder to improve efficiency than it is to increase the level of investment. It is Japanese inward investment that brought new practices such as just-in-time and team-working to great swathes of British industry.

Most Britons start their working lives with low basic skills, a high level of boredom and little motivation - and it is downhill from there. In a recent study he wrote: "The earlier failures had their roots in British institutions, and the Thatcherites were given an unusual political window of opportunity to attack them." He has concluded, though, that there are still big question marks hanging over the efficiency and technological capability of British industry, despite the Thatcherite attack on unions and workplace inflexibility.This is a conclusion that also has a clear appeal for Labour, although it would focus on a different set of institutional failures.Labour has turned the spotlight on the inefficiencies of the UK's capital markets in financing industry - and rightly. Many business people will privately agree that their institutional shareholders take a short-term view, and that they would prefer to pay out less in dividends, although most also think it is unimportant so long as they retain enough profits to finance those investment projects they think are needed.Politicians across the spectrum also agree on the failure of the education system to deliver a good education to the majority of children. It is much easier for managers to alter working practices by introducing a new machine than to march to the shop floor and tell everyone to start doing everything differently.Economist Nick Crafts has concluded that the UK's relatively poor economic performance in the 1960s and 1970s was due to inefficiency. In these circumstances, higher investment will boost output growth only temporarily - very welcome, especially as what is temporary to an economist, can be many years in real life, but not a panacea for the nation's economic ills.The clash between this dismal conclusion from conventional economics and New Labour's common-sense instinct that investment matters, can be resolved by acknowledging that it is not just extra investment,but the efficiency with which it is used that explains economic performance.In industry, more efficient ways of using capital and labour are likely to be embodied in new equipment. Mr Martin argues that the idea that higher investment can permanently raise the rate of growth, ignores the fact of diminishing returns to capital. Empirical research tends to support the conventional economic assumption that the rate of return on investment will fall the more of it there is.