Although I was unable to attend the inaugural lecture ‘Reflections on the UK Economy’ of the Visiting Professor of the Public Understanding of Business, known to everyone else as Evan Davis, I have been able to catch up with it all and the following discussion online.
The talk/lecture was introduced by the OU Vice Chancellor Martin Bean
We learn so much that was news to me regarding Evan Davis.
I know about.
I’d never registered that The Today Programme has an audience of 7m every morning, nor that that there is something to view on ‘The Bottom Line’ Radio Programme when it goes out to million on the BBC World Service.
His skill, which is apparent on many of his shows, and from this talk, we are told by the OU Vice Chancellor is that Evan combines his ‘expert knowledge with expertise.
He was raised in Surrey, his father a Professor of Technology at the University. He studied Philosophy, Politics and Economics (PPE) at Oxford followed by an MA in Public Administration, Harvard.
He then went to the Institute for Fiscal Studies
Then as an economics correspondent at the BBC.
Many accolades and awards followed.
His skill is to make complex technical issues easily understood.
‘Where brain meets charm’ is the way the Vice Chancellor, Martin Bean, put it.
The Evan Davies Lecture
Or was it a talk? (is this how a good lecture should be?)
It’s an interesting time as the Higher Education sector goes through change. He then repeated a sentiment he expressed on ‘The Bottom Line’ the previous Thursday, that it ‘feels like an 1989’: ‘A bonfire of the vanities as we re-assess’, he said.
I left the country in 1989 and worked in France. I missed it. I had work, I knew people in England who did no.
Listen to the people who change their minds or speak their minds.
Don’t listen to anyone who expresses certainty; there isn’t any.
Supply and Demand
- Basis of Keynesian Economics
- He refered to Paul Krugemnan, Peddling economies is a source for Evan’s key thesis.
- At one point he questioned why nobody, he included, didn’t ‘lift the bonnet on the Financial Sector’ to see what was going on.
The conclusion, to continue with the Top Gear, Man of Action, everything revolves around the car on the drive analogy, was that everything was running smoothly. Too smoothly? It was doing 110mph up the M1 and no one cared to flag it down.
In contrast, my late father a Non-executive director of Barclays Bank in the North East, had for a long time predicted doom and gloom in the housing market. ‘The bubble will burst, it can’t go on’. I’m sure he was amongst like-minded people at Barclays who rode the storm better than the likes of Northern Rock. That said, he had plenty invested in Northern Rock too. Is this the trick, to cover yourself both ways, don’t expose yourself? To juggle, as Evan Davis goes on to say, ‘austerity’ and ‘growth’.
The metaphor of the babysitting club
- Give or receive baby siting.
The Keynsian solution:
- Conjure up some demand.
It’s a baby sitting and gardening club.
A bit more complex than Keynes, we have a supply problem as well.
There are too many people in some bits of the economy.
We moved towards up market goods, manufacturing and sectors around IP such as pharmaceuticals we became clever at what we do.
All the little things we were making were doing well in the second quarter of 2008, such as the Brompton bike.
The services, financial, legal and accounting …
The UK is second biggest supplier of such services in the world.
E.g. The Shard.
- Safety messages in nine languages
- Run by Hong Kong hotel chain
- Owners will be foreign billionaires.
Picking up many little contracts, such as divorce cases when the super wealth fall out with each other.
- Creative industries
We export more foreign doctors than Germany.
An interesting point, but if they spoke English in German hospitals might that be the differentiator not the expertise? German engineers are better than British, possibly by dint of the apprenticeship system and engineers being trained on the job, the title having some cache too.
- Upmarket manufacturing
- Aerospace and defence
‘We’ve gone too far and need to make a shift back’.
Bog standard manufacture is what developing countries have always done, we have moved on, we have ‘re-orientated’.
This is is his conclusion, that no matter the pain we need to retreat, to get back to a more basic level of manufacturing. But is Dyson going to bring the manufacture of the Dyson vacuum cleaner back to Malmesbury? I think not.
Paradigm shift with the crash.
Why would lift the bonnet on financial services?
- Regional problems.
- The supply shift we need, but it’s a difficult task.
- Simon Renlewis article vs. George Osborne.
- We need to borrow more until the recovery takes hold … But.
- Build up the tradeable side of our economy.
So what kind of policies?
- The role of universities in export
- The global finance sector not looking at the UK’s medium sized business.
- Subsidise gardeners to become babysitters.
- No point in paying people to dig holes to fill them in again.
- Austerity vs. Growth.
From Surrey Technologies
The UK Government has just provided £10m to the UK aeroscpace industry while the French have given their aerospace industry a boost of 500m Euros. Does the UK lack ambition?
(An interesting question as ‘Ambiton’ was the theme of ‘the Bottom Line’ two weeks later)
If you can’t raise it privately, why should the tax payer …
Hard for companies in the UK to raise money.
Got to be very measured about it.
QQ2 Peter Cook
Does the Public Sector need to get smaller?
The non- tradable sector (hairdressers, what about Vidal Sasoon and the creative sector?) But no response
Is the economy is too important to leave to the economists.
Have had a tough three years for credibility.
Much of it useless or disappointing.
Lawyers as Chancellors.
N.B. People need to announce themselves.
QQ4 Doom and gloom on the BBC kills my sales to sports cars.
Casual effect … The BBC by and large do their job.
The BBC have a single narrative, so may be up or down for a period.
QQ5 Can we do to make the country more entrepreneurial?
Cultural change, Dragon’s Den reflects and contributes. The more who do it, the ore will do it. Infrastructure say of Silicon Valley.
QQ6 David Backham, buying up toxic assets. Why? Spend on infrastructure? VAT
Bank of England buying bonds … Should we be spending more on infrastructure. But conjuring up such projects isn’t as easy, say the A11. Already got cross-rail, Olympics done.
QQ7 Question, low carbon economy and how will in help.
Not in the short term, but will as prices balance. Invest where we feel.
QQ8 Stuart Forrester, from german engineers, MA at OU.
A bit of either, Japanese showed us how to run a car plant. All comers welcome. And let us have our own. It is a global world, so cannot retreat.
A point to finish on.
The innate abilities of the British Public. Never going to be a smooth path.
Always going to go too far and tack back.
Don’t need to berate ourselves … Self-criticism, various false price signals, shift resources … We’re a medium rank developed nation.