The knowledge economy delusion

A key contributor to the economy’s vulnerability is a belief that our manufacturing heritage, with more than 250 years of deep experience, can be replaced by the “knowledge economy”. It is expected that the information technology revolution will do for us what the steam engine did in the 18th century.

That our ability to sell knowledge will be the game changer was recently challenged by international entrepreneur guru, Professor Andrew Graves, in a recent talk he gave at a Watershed event. He was clear: We are simply shifting wealth around and not creating or adding to it.

The scale of ambition to tackle this deep systemic deficit in the UK economy appears lilliputian against the size of the need.

The UK currently graduates 20,000 engineers a year – hopelessly too few for what is required by the economy. Unfortunately, 10,000 of those are foreign citizens who leave the country on graduation – a shocking figure given that at any one time Rolls Royce is short of around 600 engineers. By contrast, China and India are graduating engineers north of 200,000 a year. The mental and behavioural infrastructure to even contemplate producing these numbers begins at the earliest age and sits deep within the culture. It is a mindset which is developed over time and it cannot be bought off the shelf.

In his recent report dealing with re-engaging the entrepreneurial spirit in the UK, Lord Young suggested that an early start be made by engaging primary school children. The idea to give each pupil a £5 note and then see how they can increase the investment, to raise the awareness about entrepreneurial behaviour is a good place to start. This is laudable as its stands. Big things start off small. The challenge is to ensure that this headline catching idea moves from media-fueled transience into something substantial over time.

It is true. We do need to start young.

The UK needs to identify and develop a generation of wealth creators and for this to happen we need to re-engage with what constitutes entrepreneurial spirit. This is an inter-generational project which cannot be outsourced. It needs profound insourcing into our social and economic culture by people who have a heart for the reformation of an entrepreneurial mindset in our country.

As Peter Drucker observes, if we want to predict the future, we need to create it. We have everything at hand to flip us out of the economical downward spiral. It is called entrepreneurship and it can be used to re-ignite the decline in high-value jobs that are rooted in our manufacturing heritage that reaches back 250 years.

Simon Middleton is director of Watershed Entrepreneurs.

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