
The excellent Jeremy Warner summed up the bafflement among politicians in the Telegraph last week, following the grim (0.2 per cent is surely within rounding error territory) economic growth figures.
“The bottom line,” wrote Warner, “is that you would expect to see some recovery momentum building by this stage of the cycle, and we are not getting it. Indeed, if anything the outlook is worsening, both domestically and internationally.” In the following days, business secretary Vince Cable announced the results of his admirably social “Red Tape Challenge”, enabling teenagers to buy liqueur chocolates.- First, consumers aren’t going to recover their spending power or confidence any time soon. Most businesspeople will tell you that annual salary rises are a thing of the past. No-one’s earning much off their savings; many have seen share portfolios decimated. Inflation is being felt across every household. We are not in a typical cycle; more fundamental changes are afoot.
- Second, our infrastructure is dated. From housing stock to broadband; from the rail network to our vehicles, we’re puffing along with kit that should be a source of embarrassment; it already is in many emerging economies. In China, 3,000km of high-speed rail network has been built in the past two years; and it will do the same in the next two. Many corners of the UK can’t get internet access. On the Hong Kong Science Park, the Chinese electrical car company, BYD, is moving into a new phase of development, creating cars for the European consumer. (Why the hell aren’t we doing that?!) When big bold projects such as the north-west Bicester eco-town get put forward (and which could become international exemplars of British creative talent), they get caught up in the thickets of planning.
- Third, and it’s a development of the previous two points: we’re in a digital revolution. Even if the hard-pressed consumer could find another £100 a week to spend on Sky Plus or leggings, their habits are shifting dynamically: we expect more and more for free; we don’t want to trudge down dreary high streets; organisations need to become “live”, providing instant, up-to-date products, services, information, updates. Of course it’s sad to see the demise of familiar British high-street and service names (Habitat, Woolworth’s, Comet etc) but too many simply don’t fit with the new age.
- Finally, and perhaps most important, we’ve got to get expansive. I may sound like a broken record, but the domestic UK economy is in the doldrums; that’s not going to change for many years. It will only improve if our businesses start targeting growing markets with modern propositions (see point three). It’s brilliant to see McLaren opening a new supercar engine plant in Shoreham, West Sussex; and, indeed, a new showroom in Wan Chai, Hong Kong. This combination of engineering excellence based in the UK; and focus on growing international markets is the only route out of national stagnation.
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