I’m writing from the annual conference of the Confederation of British Industry (CBI) in London. This annual shindig is where the captains of industry get together once a year to talk about the big issues of the day. Quite often this might be issues of tax, red tape, the minimum wage and various of pieces of legislation that the UK has adopted from diverse EU directives, but this year it’s all about India, China, and the perils of globalisation.
The opening session of the day was titled ‘China and India - facing up to the challenge’ and immediately followed a keynote speech by Conservative Shadow Chancellor George Osborne. Osborne and his leader David Cameron have developed into the masters of spin in the same way Tony Blair did before his own rise to power in 1997. I was only just looking at the weekend newspapers featuring photos of Cameron helping destitute children in Darfur and as his Shadow Chancellor speaks in Islington, he is off to meet our troops in Iraq. They have a formidable PR machine driving the Tory image at present.
The CBI has become very concerned about the challenges presented by the powerhouse economies of China and India. They want to understand how do we compete in, and with, these exponentially growing economies. The conference blurb asked 'And what are the opportunities and challenges of working in partnership in third-country markets?' Is 'third-country' a new euphemism for ‘third-world’ that I just haven’t run into yet? I thought ‘developing world’ was the standard, but when you find countries like India and China where immense wealth rubs along with grinding poverty ‘developing’ is somewhat of a misnomer. I heard a commentator on TV calling the developing world, the ‘two-thirds’ world. He might well be technically correct, but I don’t think that one is going to catch on either, so for me I guess it will have to stay as ‘developing’ until someone comes up with a better definition for those countries that are newly-developed, but still poor in regions.
The main concern for the CBI has been to ask the question ‘how does the UK shape up against India and China?’ It’s an important question and our news bulletins are becoming full of M&A activity that far exceeds the impact of a few call centre jobs lost here and there. The Indian Tata group makes the tea that’s in your mug (Tetley), and could possibly be the owner of the old British Steel company – now known as Corus – if their takeover plans go through without any hitches. The hard-nosed face of Chinese industry was also exposed to the British consumer when MG Rover collapsed not so long ago and the state-run SAIC swooped in to scoop up the juicy bits of what was left over from the British marque.
Yet, the story is so much more complex than a raid on UK industry by those in the East seeking to grasp economic development as fast as possible, and at our expense. The Tata Group is also a major employer in the UK. In fact, most of the offshore suppliers in the technology industry (where I normally focus) have realised that they won’t be invited to the table on large deals if they are not employing people locally; you just can’t outsource everything offshore because it is cheaper. We are experiencing a fundamental shift in the way people are employed, creating what the sociologist Manuel Castells termed a ‘network society’.
In my view, the concern about India and China should be seen more in the light of supply-side economics. I mean, we should not be too concerned about the now – because the truth is that UK companies are still world-beating, especially in services. We need to think more of the next generation and how our economy can compete in a global environment – where peer-to-peer systems will allow any company to located expertise in any location. Let’s sort out the mess over A-levels and work out some better funding for kids at university, along with improving vocational education, because if we don’t start training the people who will lead British industry in future then we all know where it will end up.



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