This week, The Economist took a sledgehammer to the Prime Minister, his party (in both senses of the word) and Britain’s economic prospects.
According to the magazine, we’re in a “15-year rut”. Our GDP per head is 25% lower than America’s and we’ve been falling further behind both America and Germany since the mid-2000s. Average annual GDP growth over the decade preceding the global financial crisis was 2.7%, now it’s just 1.7%.
“In the decade to 2007, British productivity growth was second only to America’s in the G7. In the decade to 2019, growth in output per hour worked stalled to just 0.7% a year, making Britain the second-slowest in the G7; only Italy was slower. Had Britain’s productivity growth rate not fallen after the financial crisis, GDP per person in 2019 would have been £6,700 ($8,380) higher than it is.”
I could go on. The Economist article does, citing export data, OECD predictions and much else to hammer home the truth.
For all these problems, there is “no shortage of ideas about how to turn the country round. But the mettle and strategic thinking that reform requires are absent.” This is fighting talk. Comparisons are made with 1979, before Thatcher came to power with the final line of the article echoing her slogan: “there is no alternative.”
We’re optimists here, and believe entrepreneurs will dig us out of this hole. But politicians set the rules of the game and can hold back innovation in thousands of ways. As the article says, it’s not for a shortage of ideas. And I don’t just mean ours that are yet to be implemented – I mean elsewhere too. I’ve been working in think tanks for decades, and when it comes to good ideas, we’ve never had it so good.
Take the Oxford-Cambridge Arc, which would link up the two cities and everywhere in between like Milton Keynes and Bedford. The original plan was to build a new rail link, new homes and an expressway, but bit by bit the project has fallen apart, with only the rail link left.
Stian Westlake, CEO of the Royal Statistical Society, author, and former government adviser (and one of our Research Advisers) appeared on GB News explaining why the lack of guts on this is such a big deal.
As well as backing the Arc, Westlake suggests building a new city outside Cambridge, on a square mile of unremarkable farmland. This doesn’t need to be ugly, and he suggests looking to Edinburgh’s New Town for inspiration: “Cambridge could be a city of a million people and power economic growth into the next decade.”
Those Who Can
In a couple of weeks, we’re launching a report with the APPG for Entrepreneurship on Entrepreneurship Education. It’s a topic that we’re passionate about – and I know many of you are too. That’s why it’s a big area of focus for us.
This report is kindly sponsored by finnCap, which does some incredible work supporting young entrepreneurs through A Fairer Foundation and The Side Hustle Initiative.
It will be launched in the House of Lords. If you’re an Adviser or Supporter, drop our events team an email confirming your place. Otherwise, you can request a place here. Looking forward to seeing many of you there!
Million Pound Question
Our longest running project is the Female Founders Forum. Built and run by four incredible women – Annabel Denham, Sophie Jarvis, Katrina Sale and Aria Babu – with support from across Barclays, each year has been bigger and better than the last.
To remain at the cutting edge of research done in this area, this year we are interviewing the most ambitious female founders, to find out what their thoughts are on entrepreneurship, learn about their businesses, and profile them as examples to champion.
We’re focusing on the most successful female founders because we want to know how to get more of them. If you’ve raised over £1m (or can demonstrate your success in another way), drop Aria an email to get involved, which could include being featured as a case study in her final report.
As well as supporting our Female Founders Forum, Barclays is looking for applications for its Entrepreneur Awards, which consist of eight award categories, ranging from start-up through to sustainable success and this year. Find out more here.