Sir Roger Carr, top bod at the CBI no less:
We must build a national mindset that recognises that wishful thinking for growth is no substitute for hard work and that big business is the engine of growth on which many small businesses depend and by which our national prosperity is propelled.
Err, no, it ain\’t. Big business is very nice to have of course, it\’s the long term result of success for small businesses. But economic growth tends to come from those small businesses becoming large ones, not from large ones themselves expanding.
A five-point plan is required. We must identify and invest in those areas of the economy where our competitive edge can be boosted to world-beating leadership.
And that\’s government picking losers again. Welcome back to the 1960s.
We\’ve two things going on here. The first is just the usual, man talks own book. Of course the bloke who represents the UK\’s large businesses is going to say that large businesses are important. Just as union leader will say unions important, the ice cream manufacturers association will insist that ice cream manufacturing is vital and Worstall will say that Worstalls are such lovely creatures that they should be cherished and subsidised.
The second is a conceptual problem. When the economy is well behind the technology curve then identifying useful sectors to invest in isn\’t all that difficult. Cambodia has pretty much no manufacturing industry and average wages around $100 a month if people are lucky. Lots of women around who don\’t like wading through paddy fields as well. It\’s pretty much of a no brainer that getting into the low end of the rag trade will make things better. Slightly further up the scale the Thais getting into hard disk drive assembly.
But when you\’re at that technological frontier, which is pretty much where Britain is, it\’s much more difficult to know who might be \”a winner\”. For the entire concept of that technological frontier implies that no one has a fucking clue as to what is going to come next. We\’re dependent upon that mixture of invention and innovation for what does: and that\’s a serendipitous process at the best of times.
And, of course, given that no one has a fucking clue how can we identify, let alone plan?
No, don\’t then come to me with stories of identifying comparative advantage. For the clear and obvious one that the UK does have is London as the world\’s international financial centre. And I think we all know that, for political reasons, no one is actually going to identify that sector as one where we\’re going to boost the competitive edge to world-beating leadership. Which is our second reason to reject the concept of industrial planning. Since everyone obviously isn\’t going to choose the sector where we actually are globally competitive then the entire concept of trying to choose sectors is bollocks, isn\’t it?