The consensus among economists seems to be that this is a U-shaped recession, not a V. The question is how long the trough at the bottom will be. There has already been speculation that we are seeing the green shoots of a private sector-led recovery, but full recovery is likely to be arduous and uncertain.
We need a renewed focus from government on the needs of the real economy. The overarching theme of recent years has been the promotion of entrepreneurial spirit. Ingenuity ought to be the watchword for the coming decade: ideas that exploit leading-edge scientific research to address issues facing industry and society.
And instead of concentrating on business plans with massive profits in year three, we need a longer term approach from government. UK PLC requires a grand plan for its future, or at least a proper debate about the kind of economy and jobs we want to see in 10 or even 20 years time.
That's not a terribly British thing to do, I realise. We generally prefer to discuss the means, rather than the end. Pragmatism is not a goal in itself, however.
We can all agree that we want the city of London to be an international financial hub and our political machinery is geared up to deliver on this. But public statements of ambition for industrial sectors lack this level of commitment.
Efforts to ensure we retain a lead in the defence and aerospace sectors seem half-hearted in comparison. Energy and transport need considerably more leadership--and incentives.
One gets the feeling however that approval ratings define policy far more than any vision of what we could do to keep improving our economy. We need government to look at the macroeconomic trends that will shape society and international trade in the coming years. And we need to make an honest appraisal of our current competitiveness in key sectors.
If our intention is to become a leader in zero-emission energy, say, then we need a domestic market for things like electric cars. But we need to recognise that the real value may not be in the design and manufacturing of the devices.
Austria is not an automotive superpower, but has made good money out of engine development. Most of it is from its expertise in testing. As transport electrifies, issues such as electro-magnetic compatibility, durabilty and climatic testing become more and more complex. There are a lot more unknowns in an electric vehicle than in one powered by an internal combustion engine.
Because so much more is new technology--the motors, the batteries and the power electronics--there will be far less validation data available to developers. We'll need to test everything, in isolation and then when it's put together.
Recovery may be uncertain, but it's clear that these technologies are needed. Companies need to position themselves for this and they need government to back them.
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|Article Type:||Viewpoint essay|
|Date:||Jun 22, 2009|
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