On February 17, 2011, Professor John Van Reenen gave a lecture on the future of economic growth in Britain, continuing the LSE Works series of public lectures sponsored by SAGE. These lectures showcase the works of LSE’s Research Centres and offer an opportunity for discourse on various findings.
The Hong Kong Theatre at Clement House reached its full capacity for this evening lecture, with 234 people in attendance. Professor Van Reenen, a professor of economics at LSE since 2003 and director at the Centre for Economic Performance (CEP), presented a case for economic reform, including his views on public policy, for the improved growth of the UK economy after the recent recession.
Following this case, Jonathan Haskel, professor of economics at Imperial College Business School, gave a response with his critique of Van Reenen’s suggestions.
In analyzing the potential growth of the UK market, Van Reenen identified trade policies, relaxed planning, less distortionary taxation, proper subsidisation of research and development, and improved management as key in closing the productivity gap in Great Britain. For the most part, Haskel agreed, placing more emphasis on intangible assets as a source for growth and as a large investment opportunity.
Both men believe the government should remove the Patent Box subsidy for intellectual property and that policies should shift towards a more liberal immigration approach in order to augment human and intellectual capital for expansion. Although the discussion left uncertainty about the expected sources of the most growth in the UK economy, Van Reenen and Haskel both called for government intervention and macroeconomic policy reform in order to create more favourable conditions for accelerated growth.
Video and audio are available from this event.
One Comment
As usual the social scientists do not comprehend where the great wealth comes from. They do not understand that it takes a very select part and special individuals to start the whole process off. Tweaking here and there will do little in the global markets of tomorrow. It isa bout time taht they homed into the fundamental building blocks of economic dynamism and supported new thnking out of the box instead of the old dogma that has ruined this country.
In a mere twenty-year’s time to 2031, the UK and the EU will be reaching the limits of despair when trying to capture any major future foothold in the global economic stakes. This will not be due to its people, but their governments with regard to current and medium-term policies. These policies are inherently based in the old thinking that by joining universities and business together we can achieve economic dynamism in the future. It forgets that there are three crucial elements to achieve this – the ‘Ideas’ phase, the R&D phase and the corporate commercialization phase. I say forget, as the primer of this most important energiser for economic wealth creation, the ideas phase, is not taken serious and where it is the most important and fundamental missing factor. For without world changing ideas first the process cannot even begin. The British and EU system does not comprehend what the history of S&T tells us where up to 75% of all the inventions that have made the modern world what it is today, did not emanated within the confines of our universities or advanced corporate research centres of excellence, but in the minds of ‘independent’ innovators, far remote from the final two innovation elements that constitute the ‘innovation chain’. Indeed, the ‘independent’ ideas element is more-or-less nonexistent in UK and EU economic policy. This is unlike what is emerging in the East and where they are now starting to see that the ideas people are the most important commodity that a nation has. In twenty years time therefore with this lack of foresight and new thinking in Britain and the EU, we shall in reality just be hangers-on in the global economic stakes. Therefore for its own good, the United Kingdom and the EU have to start thinking ‘out of the box’ and give total prominence and resources to the initial ideas people. For if they do not we shall see in our own lifetime the inevitable collapse of living standards, the like of which we have shall never have seen before and where our offspring will live to be totally subservient to the economic might and power of the East. That is why it is so vitally important that we create now the innovative infrastructure throughout Europe for our ideas people to flourish and thereby equip our nations with the dynamic products and services that we shall dearly need. When will the UK and the EU realise this is the big question, for it has the most overriding repercussions and consequential economic effects that have never been seen before for the 500 million+ people of the European Union? We really have to start thinking ‘out-of-the-box’ like our Eastern counterparts before it is far too late to stem the economic decline that is now upon us all.
Dr David Hill
Executive Director
World Innovation Foundation