In fact, we are terrible at it.The above chart tracks our export market share. It is the amount of exports we ship off this island compared to total world trade. The numbers start in 1986, which is set at 100 in order to illustrate the decline more easily. From there, our market share falls. By 2007, our market share has declined by almost a fifth.
Our market share picked up a little when we get kicked out of the ERM back in 1992 and sterling collapsed. However, that positive upswing petered out by the time New Labour took control.
It all comes down to the same basic point; we are not paying our way in the world. Instead of grafting, we are borrowing and it can't last. In fact, it has stopped. Sterling has again collapsed; and the economy is in recession.
What is the solution? Well, it isn't another round of borrowing and consuming. We can't spend our way to higher export growth. We have to make things people abroad want to buy.
16 comments:
Let's pray the governernment doesn't try the usual desperate remedy - having wars with people and recycling taxes back through our own arms industry!!!!! B.
Actually given the phenomenal growth in Asia, are those figures as bad as all that? Would have to dig up comparable for France, Germany etc.
blooKat said...
Actually given the phenomenal growth in Asia...
A worthy point but then it raises the question; why haven't we (with our supposedly hi-value, hi-tech exports) matched, or even beaten, Asia?
There's no excuse. Alice is right, we're not paying our way in the world. We're not even able to flog off our oil to pay for a few basic essentials.
Britain is bust.
A pedant writes
Didn't you set 1986 at 110 ?
(i.e. not 100)
Get you to the school of Hansen........
Yup.
We have to get back to making stuff.
I'm sorry to inform you though ...
... we can't do this until our workers can compete with the Chinese which means ...
...we're all going to get a hell of a lot poorer.
People here are in for a huge shock.
The only agenda for Electro-Kevin (appart from trying to make people laugh) is that we preserve law, order and civility in this country.
With those in place we can handle anything the World throws at us and no matter how poor we get.
Love those suppressed zero graphs and incorrect starting points...they make things look so much more dramatic!
Germany is the world's largest exporter. It has a trade surplus with China.
Actually what you Brit exporting? I have no idea? I can give a long list of what china export but I really can't think of any in UK except education which is what I had bought many years ago.
mL
Nice work Alice.
I think the graph real takes a nose dive right after we hand over Hong Kong (which was our best attempt at a production base until 1997).
We could compete in that region from Finance to Manufacturing, but after hand over we really specialised in Finance.
Like any company that relies on one customer, you're vulnerable when they have bad times, and finance is having a terrible time at present.
Rather than confront this moment in history and change our direction completely, Gordon Brown and Co. have tried to revive our only industry (Finance) with more borrowing.
It really says how much he has failed to learn from past Labour mistakes, and how unlikely he is to send our economy back to a manufacturing base.
The middle classes wouldn't like it and he doesn't want to be remembered as the PM who sent the middle class back to being large communities of poor manual labourers.
Poor manual labours? No way. How to compete with chinese, indians, asians and eastern europeons? Their labour cost are much lower.
It was not because of handing over HK, it was Asian crisis.
So what does Britain do about the many millions of people who are NOT involved in financial services ?
A small enclave of distressed City professionals propping up a nation of benefits chavs is not exactly a formula for success is it !
Smell the coffee. This is our great reckonning and we don't have any choice in whether or not we become 'poor manual labourers'.
It's going to happen and that's that. If the Tories have any sense they'll let Zanu-Labour win the next election and let Brown carry the can.
the old ways (and days) of the UK as a low cost manufacturing base are gone. i've been in the university sector for ten years, and really feel a bit let down that the huge increases in spending in education never reached tertiary education. thats where we need to sow the seeds for innovative and niche ideas in biotech, engineering, telecoms, design etc. thats where we should be vlooking for the sort of value added exports this country needs for balance in the economy (assembly and packaging should be outsourced). the goverment really has to do all it can to encourage small-medium sized companies in these sorts of areas. the talent and the educators to do it are here, we have to invest in them. its just maddening looking at the amount of cash needed to prop up the finance sector.
electro-kevin is right - people in the UK will have to accept a BIG drop in their standard of living.
Borrowing to maintain a lifestyle you do not earn is just not sustainable and I see no way as to how the mounting debt will ever be paid off ?
Other countries like Germany may be in recession techinically, but they have a massive trade surplus, people have very little debt and house prices have been flat for years.
In the UK we really are in the "Brown" stuff !!!
Not all that long ago, the FCO and DTI used to run a dedicated service for exporters. Commercial officers overseas at the sharp end, many of whom fluently spoke the local language, actively sought out would be buyers in their countries and passed detailed information back to the DTI to include in their commercial information dissemination service. This was a highly praised by many users (as well as criticised of course when details did not exactly match a supplier's product) and was envied by many of our competitors.
Does this service still exist, and if not, what happened to it?
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