POLICY
global economy. Even though this emerging superpower continues to amass influence in the developing world through its BRI investments, its growth engine finally looks to be stuttering after a decade of breakneck progress, just as the nation is trying to shift towards a consumer-driven economy. Debt levels are elevated, not to mention distressed, while trade tensions heighten as Beijing continues to butt heads with Washington over import tariffs. China’s notorious opacity about its economic data is also causing jitters around the world. As global growth becomes ever more sensitive to developments in China, the UK will need to monitor levels of risk in its export markets carefully. Germany, a big importer of British goods and services,
We also need to prioritise innovation. The UK’s future competitiveness depends on whether we can play a leading role in this disruptive age of exponential technological development. US futurist Ray Kurzweil argues that a 20th century’s worth of progress happened in 2000-14 and that another 20th century’s worth of progress will happen by 2021. The government’s long-term goal of increasing investment in research and development to three per cent of GDP is a step forward. But, while the UK has always been strong on the research part – thanks largely to its world-class universities – the development aspect has been weaker. The successful commercialisation of ideas is crucial in this respect. The UK’s strong entrepreneurial culture and emerging
Strong support for innovation will enable the UK to develop higher value- added industries, reduce its dependence on professional services and pursue new export opportunities. Meanwhile, harnessing global skills – including the knowledge that immigrants bring to our shores – will be essential in building international ties as new risks and complexities arise. This will provide the requisite platform from which the UK can invest in, and trade with, territories with high growth potential.
THE ANSWER WITHIN
is on the brink of a recession partly as a result of China’s slowdown, for instance.
A NEW MODEL ECONOMY How should the British government respond to all these risks? One widely touted idea is that the country should follow a Singaporean model and attract global service providers by offering them a low-tax, hi-tech environment (turn to p33 to read more about Singapore’s potential as a base for British businesses). That may be less than workable for several reasons. To name but three, the UK is not a young, small city state; its population is almost 12 times larger than Singapore’s; and it has a far more diverse industrial landscape.
The new model for Global Britain will need to account for the country’s regional variations, building on existing strengths while prioritising national agility. Although specialisation has long been our macroeconomic archetype, diversification will become increasingly important in ensuring our economic stability.
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director.co.uk digital sector
represent a perfect launchpad for hi-tech start-ups, but strengthening ties between academia and business will truly
‘It’s crucial that grasp of regional geopolitical risks’
help this country to stay ahead of the curve. Although fostering an R&D culture is necessary, this is not enough on its own. It’s also vital that we gain a firmer grasp of regional geopolitical risks as new economic centres emerge and it becomes harder for us to access global markets, supply chains and partnerships while nationalism amps up. Part of this effort, as the Anglosphere’s cultural and linguistic currency and dominance is challenged, will involve boosting our “global competencies”. The government already estimates that weak language skills cost our economy £50 billion a year in lost contracts alone, but change is afoot: 2018 was the first year in which A-level students taking Mandarin outnumbered those taking German.
Ultimately, Global Britain will need to look inward as much as it does outward if it is to prosper in an uncertain world. Indeed, half of all British citizens believe that the UK’s sociopolitical system is broken, according to the 2019 Edelman Trust Barometer report. Addressing regional variations in the country’s resilience to global forces is key here. The UK is one of the most geographically imbalanced nations among the G7. Stark differences in prosperity have caused rural, coastal and post-industrial Britain to adopt a different viewpoint from that of the nation’s more cosmopolitan urban centres of finance and research. Improving skills development across the country, revamping infrastructure and investing in the varied strengths of the UK’s diverse regions will be essential in tackling disillusionment and unleashing the trading potential and international attractiveness of British regions beyond London. This will help the whole country to build its resilience to global risks. A Global Britain
that’s looking beyond its European neighbourhood faces a world undergoing a profound transformation. As long-held economic and political models get rewritten or ripped up and new international partnerships and risks emerge, uncertainty will become the norm. But the UK will be able to thrive in this environment if it can build global skills, stay at the leading edge of innovation and get its own house in order.
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ALAMY
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