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Life after recession - a new economy?
This week has been full of news about an end to recession. Examination of the small print reveals that it is an end to global recession, and recession in Europe. Closer inspection still shows that the UK is lagging behind some of its European neighbours, so we’ve got to keep going a little bit longer before we get to breathe that sigh of relief. And when we do come out the other end, what will the economy look like? After all, when we came out of the 1980s recession we found we weren’t making things to sell like we’d been doing since the industrial revolution. Our economy was evolving from a manufacturing base to one built on services. In South West England we depend more and more on our service industries and the public sector for employment, and for the health of the economy.
So it is little wonder that Nigel Jump, the chief economist for the South West Regional Development Agency, yesterday said that public spending cuts should be delayed as long as possible. Even if you aren’t employed in the public sector in the region, there’s a good chance that you are one of their suppliers, or that you rely on their employees to purchase your goods and/or services. When the cuts come, and come they must, we are at risk of seeing the regional economy take another dip. Unless, of course, we’ve come up with a back up plan and have started to put it into action.
So, what are our options for a back up plan? Here’s a starter for 10.
The key to growth is in knowledge based industries (KBIs). OK, that covers far too wide a brief to be helpful, let’s narrow it down. Lately we’ve relied rather heavily on KBIs relating to the financial services industry (including banking) and the public sector. So, that will be the sector that is coming to terms with its own hubris and the sector that is now bracing itself for inevitable contraction. Where do we go from here? Let’s not forget the idiom ‘necessity is the mother of invention’ and invention and research is about as knowledge-based as you can get. Let’s reflect also that innovation is what turns invention into good business.
Global concerns about carbon footprint and climate change are described in new and ever more alarming terms every day, leading to a pretty big and rapidly growing market for environmental solutions. And, just in case we still can’t see the writing on the wall, UK government has recently announced the introduction of Low Carbon Economic Areas. So the message doesn’t simply read ’save the planet’ it says ‘THERE’S A LOT OF MONEY TO BE MADE BY TRYING TO SAVE THE PLANET’.
For years the European Commission and UK national government have been shouting themselves hoarse trying to persuade us to build our skill base in science, technology, engineering and mathematics (STEM), and to put our energies into research and innovation. Global environmental industries are currently worth $3 trillion and could increase by as much as half again over the next 8 years. Now that sounds like a knowledge - based industry worth doing the maths for!
Right then, Back Up Plan - Option 2… any ideas?
Having the knowledge is only the start, though. If we truly want to look at our carbon footprint, we need the capability to develop our ideas in a local way too. The research and development often requires product development and we need to be encouraging that in ways other than manufacturing in China.