“Young people have been forced to live in sub-standard houses on the periphery of cities and forced to accept low wages for decades as their elders have got fat and happy on the proceeds of asset-price inflation and triple-locked pensions. There are admirable signs that they are fighting back by organising pro-growth organisations (e.g., The Entrepreneurs Network, Collective Intelligence, Britain Remade) and writing pro-growth publications (e.g. Works in Progress). The YIMBYs are on the march.”
So wrote Bloomberg’s Adrian Wooldridge following Civic Future’s Great Stagnation Summit. The former author of The Economist’s Lexington, Schumpeter and Bagehot columns is spot on. Not just about us being involved in the fightback, but more about the state we’re in. (On the issue of housing costs, our paper Strong Foundations explained how the planning system stymies entrepreneurs.)
The sub-optimal state we’re in was most starkly articulated by our Adviser Sam Bowman, who set the tone for the conference with the deliberately provocative claim that Britain is a developing country, and that there is virtually no recognition of how bad things are among British elites.
Sam’s full list deserves your attention, but here are some devastating facts:
By GDP per capita, adjusted for purchasing power, the US ($76,399) is 39% richer than the UK ($54,603). GDP growth since 2010 has been 47% faster – nine percentage points – in the United States (28% growth) than the UK (19% growth), despite being from a much higher level.
By productivity, or how much we produce per hour worked, the US was 38% more productive than the UK (UK $54.3/hour, USA $73.7/hour) in 2019. France and Germany were much closer to the US than to the UK at $69/hour.
Americans could stop working each year on September 22nd and they’d still be richer than Britons working for the whole year.
A median square foot of housing in the US is about half the price of the median square foot of housing in the UK (about $225 or £173 in the US, versus £331 in Britain).
The median industrial price of energy, even before the Ukraine war, was 7 cents per kWh in the US and 19 cents per kWh in the UK.
The good news at the conference came from Tyler Cowen, who, having diagnosed it back in 2011, now thinks the Great Stagnation is over. Tyler was also bullish on UK innovation, citing the development of the Oxford-AstraZeneca COVID‑19 vaccine and the fact that DeepMind started in the UK. As those of us who work with entrepreneurs all know, this is just the tip of a sizable iceberg of incredible innovation.
While Sam’s and Tyler’s stories aren’t mutually exclusive – they vehemently agreed on everything – we can’t keep getting the fundamentals wrong. Luckily, the fundamental problems are a lot easier to solve than those being tackled at the frontier of science and technology. At least, they should be.
When I’m 64
As Debbie Wosskow OBE, member of our Female Founders Forum, reminded us all on LinkedIn, the average age of a successful startup founder is 45. That’s one reason we’re working with Enterprise Nation on barriers for older people (re)entering the economy – whether that’s working for an entrepreneurial company or starting a business. If you want to feed into it, Enterprise Nation has added some questions to their latest barometer.
On the Horizon
Our friends at the Regulatory Horizon Council (RHC), an independent expert committee set up by the government, have asked us to share an opportunity to input into the unique regulatory experiences and challenges you face. You can do this openly or anonymously. While I can’t promise that the Government will act on your response, we’ve found the RHC proactive in trying to push a pro-innovation agenda. Let them know your thoughts.
You can read the whole newsletter here, and sign up for the newsletter here.