Two recent business reports have made me reflect on the future of British business in the global market place.
HP's acquisition of Autonomy and Eric Schmidt's (the Chairman of Google) delivery of the MacTaggart lecture shows how we can create fantastic companies but we may not have the vision to create world leading businesses.
Britain is the birthplace of some of the world's greatest inventors. From Lord George Murray's invention of Britain's first optical telegraph, to John Logie Baird's first practical television, to Sir Tim Berers-Lee's creation of the world wide web, we have proven time and time again that we are capable of being at the cutting edge of thought, technology and commerce. Yet in today's global market place I struggle to name a world beater to sit alongside Google, Apple and Microsoft!
The Thatcher years (and the subsequent Blair/New Labour project) as discussed by the then Chancellor Nigel Lawson told us to focus on services and manufacturing - "There is no adamantine law that says we have to produce as much in the way of manufactures as we consume. If it does turn out that we are relatively more efficient in world terms at providing services than at producing goods, then our national interest lies in a surplus on services and a deficit on goods". We could be market dominant in banking, legal and accountancy. The problem as I see it is that unless we have industries to service we have no need of a service industry (and I include computing and the "cloud" as manufacturing industries).
"We can service the world" I hear people say, but why should others use us once they have sucked the knowledge from us?
As a personal example of this, I was CFO of Laird plc's European Technology business. I asked Sir Nigel Keen (Chairman) and Sir Peter Hill (CEO) how long Laird could stay UK and independent. The Technology business was head-quartered in the United States, its major manufacturing units were moving to China, where its major customers were based. Within eighteen months we had shut down all the UK manufacturing and R&D plants and all that was left was the offices in Pall Mall. Peter's response was that London is where the money is. I pointed out, that, when the customer is in the Far East, the development is overseas and the manufacturing is in the Far East, it won't be long before the money comes from there as well.
Recently Laird itself was the target of a hostile takeover bid by Cooper Industries, which it managed to rebuff, but the problem still remains, with little IPR retained in Britain and the finance world moving towards Hong King and Asia, how long can we last on the world class stage?
HP's acquisition of Autonomy and Eric Schmidt's (the Chairman of Google) delivery of the MacTaggart lecture shows how we can create fantastic companies but we may not have the vision to create world leading businesses.
Britain is the birthplace of some of the world's greatest inventors. From Lord George Murray's invention of Britain's first optical telegraph, to John Logie Baird's first practical television, to Sir Tim Berers-Lee's creation of the world wide web, we have proven time and time again that we are capable of being at the cutting edge of thought, technology and commerce. Yet in today's global market place I struggle to name a world beater to sit alongside Google, Apple and Microsoft!
The Thatcher years (and the subsequent Blair/New Labour project) as discussed by the then Chancellor Nigel Lawson told us to focus on services and manufacturing - "There is no adamantine law that says we have to produce as much in the way of manufactures as we consume. If it does turn out that we are relatively more efficient in world terms at providing services than at producing goods, then our national interest lies in a surplus on services and a deficit on goods". We could be market dominant in banking, legal and accountancy. The problem as I see it is that unless we have industries to service we have no need of a service industry (and I include computing and the "cloud" as manufacturing industries).
"We can service the world" I hear people say, but why should others use us once they have sucked the knowledge from us?
As a personal example of this, I was CFO of Laird plc's European Technology business. I asked Sir Nigel Keen (Chairman) and Sir Peter Hill (CEO) how long Laird could stay UK and independent. The Technology business was head-quartered in the United States, its major manufacturing units were moving to China, where its major customers were based. Within eighteen months we had shut down all the UK manufacturing and R&D plants and all that was left was the offices in Pall Mall. Peter's response was that London is where the money is. I pointed out, that, when the customer is in the Far East, the development is overseas and the manufacturing is in the Far East, it won't be long before the money comes from there as well.
Recently Laird itself was the target of a hostile takeover bid by Cooper Industries, which it managed to rebuff, but the problem still remains, with little IPR retained in Britain and the finance world moving towards Hong King and Asia, how long can we last on the world class stage?
Against this backdrop Eric Schmidt gave his lecture, citing Lord Sugar's comments on the Apprentice that "engineers are no good at business" (err...Steve Jobs, Larry Page, Bill Gates, James Dyson...absolutely Lord Sugar!) and Schmidt went on to point out that there was not enough emphasis on technology in today's schools "I was flabbergasted to learn that today computer science isn't even taught as standard in UK schools," he said. "Your IT curriculum focuses on teaching how to use software, but gives no insight into how it's made.". This is shocking and does not bode well for our future generations.
He also touched on something that I have felt for some time "The UK does a great job of backing small firms and cottage industries, but there's little point getting a thousand seeds to sprout if they are then left to wither or transplanted overseas. UK businesses need championing to help them grow into global powerhouses, without having to sell out to foreign-owned companies. If you don't address this, then the UK will continue to be where inventions are born, but not bred for long-term success." As proven by the sale of Autonomy to HP.
He also touched on something that I have felt for some time "The UK does a great job of backing small firms and cottage industries, but there's little point getting a thousand seeds to sprout if they are then left to wither or transplanted overseas. UK businesses need championing to help them grow into global powerhouses, without having to sell out to foreign-owned companies. If you don't address this, then the UK will continue to be where inventions are born, but not bred for long-term success." As proven by the sale of Autonomy to HP.
I don't know the answer, but it must start with education. If you have any thoughts please feel free to post below or email me directly at michael.pay@emcltd.co.uk.
| whole-heartedly agree with the comments in this article.
ReplyDeleteRegarding the educational challenge there is space for GCSE level IT development and perhaps a technology type academy would be best positioned to lead the deployment of such a course.
On a more sober note our education system is still stuck in the 1960s - we struggle with achieving basic literacy and numeracy, our ideas of what subjects are important for study have not changed significantly since I was at school 30 years ago and the careers advice given to children today is failing to keep pace with the rapidly changing world around us.
For me, and perhaps this is a point for another day, it has a hell of a lot to do with the closed shop of teaching that bars so many talented people from making the transition into teaching from expert careers (such as IT development) - unless you train at university to be a teacher after you leave school then the cost of transition to education makes it prohibitive for most people to change later in life. This is also why so many of our teaching practices and skills are out of date because these, often very talented, educators are teaching the curriculum that they were given 20 or 30 years before.
A lot will have to change before we can realistically get to a point where the skills needed for tomorrows world are being taught at our primary and secondary schools.