The progressive think-tank Policy Network recently published ‘Owning the Future: how Britain can make it in a fast-changing world’, a collection edited by Shadow Business Secretary Chuka Umunna. It includes insights from fourteen business and union leaders, economists and politicians on Britain’s economic prospects and challenges.
Owning the Future notes that the consumerist global middle class will soon expand threefold to five billion, but that Britain must innovate and build better relationships between government and business if we are to effectively tap into these emerging markets. Also stressed throughout is “inclusive growth”, the need to restructure our economy so that gains are felt across our society.
Umunna’s own foreword recounts a discussion with the late Nigel Doughty, Nottingham Forest chairman and head of Labour’s Small Business Taskforce, about their shared belief that Labour must ensure our changing economy benefits everyone. This vision stresses using active government to spread rewards and offset the effect rapid technological advancement can have on those it risks leaving behind (the “creative destruction” economist Joseph Schumpeter famously referred to). Umunna asserts that we must be “both enterprising and inclusive”, shifting away from a status quo where the services-oriented Southeast and metropolitan centres boom while elsewhere, wages stagnate and prospects fade.
To explore how this might be done, the collection deliberately unites experts with perspectives that Umunna acknowledges “are diverse and, in some places, discordant”. To take one example, businessman and former Warwickshire Local Enterprise Partnership (LEP) chair Sir Peter Rigby mounts a spirited defence of the often-unacknowledged risks wealth creators take and calls for a tax regime that rewards them. In the very next section, Sussex University economics professor Mariana Mazzucato argues that the role of the state in enabling private sector successes is downplayed and taxes are too often misaimed or avoided outright, so the state should feel entitled to recoup more from early investments it makes in successful industries.
In his contribution, Peter Rigby also calls for larger, financially-empowered “super LEPs”, working across boundaries and influencing planning, transport and skills. Other interesting contributions include one from former Goldman Sachs economist and City Growth Commission chair Jim O’Neill, analysing shifts in the US and China and claiming that London can be the “BRIC capital of the world”, and another from LSE professor Carlota Perez, who claims that ”there is nothing inevitable about how [economic] forces will reshape our world”. Perez explains that crises like the crash of 2007-2008 have historically been followed by “golden ages”, provided leaders have managed to put the right socio-economic frameworks in place.
Sir Charlie Mayfield of the John Lewis Partnership highlights his firm’s mutual ownership structure and investments in its workforce as an example of how we can tackle our current “hour-glass” labour market (where low- or high-paid jobs are growing, while mid-level jobs disappear). Former science minister Lord (David) Sainsbury stresses the role of institutions in “addressing clear weaknesses in our national system of innovation”, while the RSA’s Matthew Taylor emphasises Britain’s fast-growing creative sector and “the links between cultural flourishing and social and economic progress”.
As the only trade union leader featured, Roy Rickhuss of Community puts forward a unique perspective. He reasons that while strong unions are a positive force for economic inclusion, “meaningful modernisation” is nevertheless needed in the way the movement approaches business and government. Rickhuss cites Community’s productive relationship with the social enterprise Royal Strathclyde Blindcraft Industries and the Scottish government as an example of such tripartite working.
I might add that similar inspiration can be found in Sweden’s likely next Prime Minister, former trade union chairman Stefan Löfven, who stated “employees have to understand that they need to change constantly”, within a secure, unionised environment. Löfven built a reputation for working closely with management and lobbying abroad to secure lucrative defence contracts for Swedish firm Saab.
Finally, economists Ha-Joon Chang and Antonio Andreoni promote an active industrial policy and seek to confront the negative “1970s” connotation this idea sometimes carries. They note not only successful examples of it in many competitor nations (the US, Germany, Japan, the Asian Tigers and the BRICS), but they also confront a historical myth by reminding us that before Britain’s free-trade tradition emerged in the 19th century, the seeds of our own industrial revolution were sown by active government. Chang and Andreoni therefore call on us to learn from these cases and mount smart interventions.
Overall, Owning the Future succeeds in its aims, pulling together many different expert perspectives on our economic challenges, but uniting them by a common thread. This is a belief that our economy needs to be drastically more competitive if we are to succeed in a challenging global environment, but that we can only truly do this by becoming more inclusive and equal. In some form or another, government institutions will need to be an active partner in achieving these intertwining goals.
Elliot Bidgood is a volunteer researcher at LFIG