It’s time to transform the UK economy

It is said that crises provide fertile ground for innovation. This is only partly true. The acute pressures, the falling away of pre-crisis norms and the sidestepping of regulations, liberate individuals and teams of people to come up with great ideas about how to do things differently. This fresh thinking can originate better, more effective and efficient ways of conducting existing productive activity, or it can conceive brand new products or services that improve people’s lives.

Certainly in this pandemic and the lockdown crisis, we have already seen lots of inventive deliberation.  But where the saying falls short is that devising creative ideas is not enough for innovation. Innovation represents the implementation of that creativity for social benefit. While crises can be great times for ingenious thought, novel ideas only become innovations when they are applied and are replicated to bring change, improvement and progress to people’s lives.

This conception of innovation brings out the biggest obstacle to seeing much of it happening in the medium-term future. We are not just in a period of crisis, but a crisis within an existing state of economic depression. Depression is not simply an extension to recession, in the way it is being discussed today. It is a protracted phase of economic sclerosis that has become self-reinforcing.

Read the full article here.

Foster new sectors

I have submitted a Response to Questions 1 and 2 in the Green Paper Building our Industrial Strategy (Department of Business, Energy, and Industrial Strategy, January 2017). The submission can be read here.

This is part of a collective submission from the Institute of Ideas Economy Forum called ‘Go for Growth’, available here.

The truth about the Single Market

With Brexit negotiations about to get underway, one area that continues to get a lot of attention is Britain’s future trading relationship with the European Union. People still opposed to exiting emphasise the economic costs they fear from leaving the Single Market. Many fret that the two-year limit for Article 50 negotiations is too short a time to come up with a replacement trade deal. Moreover, if one is eventually agreed, possibly after some interim arrangement beyond the two years, they say it is bound to be a poor substitute for the advantages of full membership. Even many Brexit supporters seem to accept that more expensive and reduced levels of trade with the EU would be costly for the British economy, depicting this as a necessary, if unfortunate, expense of regaining sovereignty.

We should all be less negative about the economic consequences of changing Britain’s trading relationships.

The full article is here.

Keeping the zombie economy on its feet

On 23 January the British government introduced its long-flagged industrial strategy. It was another in a long line of disappointing launches of industrial policies. I wrote an article explaining that Theresa May’s ‘modern’ industrial strategy isn’t nearly enough to boost productivity. Moreover, government economic policies that have primarily propped on the zombie economy are making matters worse. The article is here