Sunday, 8 March 2009

Towards Core Stability

No, not a post on my recent engagement with Pilates. Instead I am going to be a little Englander for a moment. This isn't out of prejudice: it is more a consideration of self sufficiency.

What's the problem with being an exporter? It is that if your clients stop buying, your economy runs into a wall. Look at Japan.

The problem with being an importer is that it is easy to import inflation.

A measure of self sufficiency therefore has some interest. The problem for the UK is that, with a few exceptions (cars, killing machines) we killed out manufacturing industry, making progress towards self sufficiency very difficult. It also makes our natural shortage of material much worse from a country risk perspective.

Therefore part of any long term financial stability plan should be the revival of manufacturing, especially engineering-based manufacturing, at the expense of financial services. It isn't impossible: Thatcher only killed manufacturing in the 1980s, and there are still some good engineers left (although many of them are retiring). This story is a tiny ray of light in that regard. But much, much more is needed.

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1 Comments:

Blogger Cognitive Overload said...

Some of us are trying very hard to make this happen. But it isn't easy: the distribution curves of company size are against us (typically, 1 man and his dog; 5 people; 100 people or 5000), mainly because there's not enough financial support or streetwise business help for the currently tiny engineering companies that should eventually become larger ones.

12:18 am  

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