These are excerpts and my comments from a speech delivered on January 6, 2009 at The Work Foundation by Peter Mandelson, Britain's Secretary of State for Business, Innovation and Skills: "Going for growth: building Britain's future economy"
1) "..In Britain we still have one of the best environments in the world for starting and growing a new business...."
Comment: Probably true.
2) "... As the Government will explain in the strategy for economic growth we are publishing tomorrow, how we create future jobs won’t be the same as in the past. We will turn new technologies into jobs, like those in digital and biotechnologies. We will commercialise the output of our hugely successful science and research base. We will turn low carbon into business and employment opportunities."
a) Turn new technologies into jobs, like those in digital and biotechnologies? Easier said than done. Target markets?
b) Commercialise the output of Britain's hugely successful science and research base.
Again, that is riding on the assumption that science and research drive innovation and entrepreneurship. A view shared by the EU's Lisbon Strategy. IMO, mot necessarily. Creativity, innovation, new ideas and new products and services, especialy services IMO are more driven by the entrepreneurial curiosity and spirit than R&D per se. But then, I am a heretic.
c) We will turn low carbon into business and employment opportunities. Again, a popular assumption, but how realistic?
Why do politicians in the US and Europe refuse to acknowledge that their economies are by now mostly Services and manufacturing makes a small contribution to the GDP and to jobs?
3) ".. I quite understand why people who worry about getting into debt themselves are naturally concerned by the current scale of the deficit the government is running.
But managing a family’s household budget is not the same as managing the public finances prudently..."
Comment: Valid syllogism, to some extent.
4) "...Other governments are actively investing in their industrial strength. We have to do the same...."
My comment: Again, I wonder why politicians in the US and Europe refuse to acknowledge that their economies are by now mostly Services and manufacturing makes a small contribution to the GDP and to jobs?
5) "....Of course consolidation is vital. But we have to show more sense and more caution that simply adopting a one club policy of cutting spending. Unfortunately, my friend George seems resolutely determined to duck the lessons of history and be the Montagu Norman of the 21st century...."
6) ".... British business still suffers from too large a tail of poor management and low productivity and the financial crisis demonstrated that the long-termist business culture needs to be more firmly established. There is a debate within business on business models, especially the reliance on debt over equity..."
Comment: Curing shortermism in British business is not that easy, IMO, especially under the current global systemics and dynamics.
7)".... Reality demands that the centre left cannot and must not confine itself to the politics of distribution. We need a new and renewed politics of production. And New Labour above all has to articulate this new politics that will allow Britain to earn its way in the world and support our public services and welfare system.
We need a politics of long termism over short termism.
Of a smarter, more effective and affordable state.
Of a return to the values of hard work, enterprise, corporate stewardship and mutual commitment over those of dodging responsibility, making a fast buck, and putting self before others.
Of working together as a nation to address the shared challenges of the future, not social divisiveness or outdated ideological obsessions about the State or doing away with government.
We need a dynamic economy and society, but we also need to understand that while people want opportunity, they also want security for themselves and their families in a fast changing world. ..."
Comment: "earn", "value of hard work", (value of) enterprise, (value of) corporate stewardship and mutual commitment". How relevant are these traditional values to the competitiveness models of global 2010? They sound so 20th century, IMO.
8) "...Although it has not grown at the rate of the rest of the economy, the British manufacturing sector did not in fact contract in absolute terms in the decade before the recession – its output in both value and volume has remained stable despite the fiercest imaginable competition.
The resilience and reinvention has been helped by flexible labour markets which in this period became culturally embedded in the private sector..."
Comment: I will comment on the above and their practical implication for the UK Services based economy on a future occasion.
First and foremost we need to foster a new climate for enterprise in Britain. There is no substitute for this - no substitute for the drive and ambition that it brings. It can sometimes be a touch ruthless and raw. But it is the single most important engine of economic progress. The recovery cannot be driven by consumer debt or public spending. It will be driven by private sector investment and private enterprise. ..."
True, in business, "climate" is indeed almost everything.
10) "...Our 18% capital gains tax rate is among the lowest in the world and our corporation tax rate among the lowest in the G7. A competitive tax environment is something we must preserve.
On this subject incidentally the Tories’ promise of corporation tax reductions turns out to be paid for by the abolition of the annual investment allowance and cuts in the vital business capital allowances, which shows a real tin ear for what business actually needs..."
11) "....Our 21st century economic growth needs to be built on innovation at the knowledge frontier, addressing new challenges such as climate change and decarbonisation and exploiting new digital and materials technologies.
For this reason, it is vitally important to preserve our research capabilities even through a period of increased constraint on investment. Our universities must focus on research that offers the greatest economic potential, prioritise excellence, develop partnerships with industry, specialise around their core strengths and not be afraid to develop distinctive missions. ...."
Comment: See above comments re correlation betweeen innovation and E&D. And the reality of a Services economy!
The entire speech (23 pages) can be found at the Work Foundations website