A couple of good signs amid fast-changing economic scene
Posted on 22 November 2012 | 3:11pm
One of my main themes out on the speaking circuit is that Europe is not adapting quickly enough or well enough to perhaps the single most important geostrategic change happening today – the shift of power and wealth from West to East.
There was a hint of the western world being in denial in recent weeks as coverage of the US elections dwarfed the news of China’s new leadership being appointed and unveiled to the world. Hands up who can name the new President and PM of China? And hands up who can name Barack Obama’s defeated challenger?Yet if trends continue the power of America will continue to fall while the power of the Chinese will rise.
As China and other developing economies have grown, we have tended to see the growth as a consequence of our markets benefiting from their cheap labour. But in coming years they will be the source not just of labour but of ideas. Think of the massive breakthrough names of recent times – Apple for example – or the giants of the new media like Facebook, Google, Twitter and YouTube, and they are all American. But China and it’s Asian neighbours are ready to challenge not just on cheap but on big and bold too.
That is why Michael Gove’s backward looking approach to the curriculum is so disappointing as well as dangerous . He wants kids to be learning Latin when he should be thinking about getting Mandarin and Arabic into more schools. He wants kids to focus on basics without understanding in today’s world that must also include an understanding of the pace of change in the world, and the need for business and the education sector to adapt to that.
It is why the Tories’ dangerous game on Europe is so misguided too. Britain out of Europe – which because of their strategic failure and lack of leadership is now a real possibility – will be a disaster for the UK. Combine the UK out of Europe and Scotland out of the UK and we are heading to the ranks of low to middle ranking powers.
Yesterday I attended a couple of events which at least gave me some hope that there are still people out there who are kicking in the right direction.
Pharmaceuticals giant Sanofi is ending production at Dagenham after 80 years, because of patents which are running out and making drug production there uneconomic. It came as a big blow to the area, followed not long after by Ford shutting down there too.
But Sanofi are not just shutting shop and walking away. They are following the model of a company called SOG in Runcorn which took over the former ICI site when it shut and created The Heath, a science and technology park for small and medium sized businesses. Both Tony Blair and Gordon Brown visited when in office and described it as a template for regeneration and it is great to see it being rolled out elsewhere.
Sanofi have launched Businesseast, and their plans are well advanced for a Dagenham version of the Heath. Both former Tory minister Steve Norris and I have been to the Heath and seen the success story it represents. So we spoke together at an event at Sanofi where we witnessed the sight and sound of Unite leaders and Norris (self-confessedly to the right of Attila the Hun) joining in praise of the way the company had carried out the closure and its responsibilities to the community. There are facilities and personnel on the site which can easily adapt to new companies coming in and it is terrific that Sanofi are staying around to try to make that happen, not least because science and R and D will be fundamental to that battle for ideas that will shape the economy of the future.
Later I spoke at an event organised as part of National Freelancers’ Day by the Professional Contractors Group, PCG. They started out as a protest group to a tax change made by Gordon Brown in 1999 but have grown and developed as the role of the freelance in the modern economy has grown. One questioner asked if in 20 years’ time freelancers (currently a seventh of the workforce) will out number staff on the payroll. I said No, but the fact it was even asked showed how the economy is changing and we are all having to adapt to that. Those, individuals and countries, who adapt best are the ones who will do best in the future.