I found myself at the weekend facing a rotten garden bench in a state of disrepair. I wanted to rebuild it, to return it to its former glory, only to find myself reflecting on my own inadequacy when it comes to all things practical. As the son of an extremely talented engineer who seems to be able to turn his hand to anything practical, I reflected on the need for the UK Economy to have less like me and more like him. Making stuff is what it’s all about and what we have gotten too far away from.
I once made the mistake of saying to a prominent member of the then Shadow Cabinet that “of course the real problem with the UK economy is the fact that we don’t make anything any more” only to be put firmly in my place. The UK is the worlds 6th largest manufacturing nation and is still home to some of the worlds leading names in cutting edge engineering (Rolls Royce for example). Just a week after the Office for National Statistics revealed that the UK economy grew more than expected in the first quarter of 2010, the same body revealed that UK Manufacturing grew at its fastest rate for 15 years.
Regardless of where you live, manufacturing is the key to creating jobs and wealth. The problems of the UK economy reflect an over reliance on the service sector, public or private. Getting back to inventing and making stuff the rest of the world needs is what we now need to fuel economic recovery creating jobs and wealth in the process.
Take Brazil. Often overlooked by the success of China and India, the economy is forecast to grow this year by 6.1%. I am sure Brazil has its problems, what country doesn’t? But Brazil is innovating, engineering, manufacturing, making stuff, making money and bringing huge swathes of its population out of poverty as a consequence. A recent initiative has seen the Brazilian Government fund 25% of the purchase price of a house for low-income families, evidence of how a booming economy can really help the wider population without having to rely upon an over bloated public sector.
The World Economic Forum show Brazil as the top country in upward evolution of competitiveness in 2009. 60% of its exports are manufactured or semi – manufactured goods. Innovation is immense and the country enjoys a sophisticated technology sector. Research in to renewable energy and sustainability is growing. Brazil is now leading the way in ethanol production techniques for example. Unemployment is at 7%, still too high but down every year since 2004 when it peaked at 12.3%. Corporation Tax is 15%, encouraging inward investment and creating employment.
For a country to prosper, it needs to foster a low tax environment that encourages investment by its private sector. This in turn creates jobs that in turn creates wealth. A significant chunk of that wealth must be re – invested in education and in particular in the sciences and mathematics, the disciplines that encourage great invention, innovation and engineering. We need our scientists and mathematicians to focus on innovation that encourages sustainability, to make the stuff we really do need, to protect the planet from being eaten by ravenous humans hungry to consume. Investment in science, engineering, technology, sustainability and energy is long overdue in the UK and in much of the Western World. And all this from someone who struggles to hammer a nail in straight! Back to that Garden Bench.