It was great to contribute to this. You can read my essay (focused on the practicalities of an abundance agenda in the UK) but more importantly all the other great ones in this edition of Progressive Review. I hope some of these ideas are picked up in HMG.
Yes possible, though big hurdles remain largely undiminished. But as I say, may be other reasons to pursue a closer relationship, such as the one you set out. But I think there are people who see the closer relationship HMG talks about now, as a short term growth lever which I don't think it is.
Therefore plays a role in minimising economic gains from a closer relationship sadly. It is one of the reasons - alongside negotiating time, implementation time & lack of ambition - why the current discussion of a closer relationship is not a real lever for economic growth, esp in short run (4/4)
They will need to be assured this is a long term shift & the value generated from reversing (i.e. more investment) will be maintained in the medium to long term. Unfortunately, it is basically impossible to give them this guarantee given UK politics. (3/4)
This has important implications. Many businesses who have invested significantly into EU operations are not simply going to reverse that, even if the relationship is improved. (2/4)
An interesting paper on an underexplored part of Brexit impacts. Broadly confirms what those of us who worked with business on implementation saw first hand. But I think the key point here is the one they make about sunk costs. I think many of these are already in play (not 3-5 years away) (1/4)
Read the full report The Productivity Frontier: UK Leaders, Laggards and the Growing Gap here 8/ ENDS t.co/UA3Gxabj3f
We set out some thoughts about what this means for economic policy in the UK, but this is also just the start of a series of reports looking deeper into these issues this year. Key is that this isn't a one size fits all problem 7/
At a firm level, the UK also has a longer & deeper tail of less productive firms. The number of firms in the bottom quartile of productivity has grown much faster than the overall number of firms. The bottom 5% are also less productive in real terms than in 1997. 6/
These sectors have historically been responsible for the bulk of UK's productivity growth. From 97-07, they accounted for 84%, from 08-18 they contributed 46% & only 34% in 19-24. No other sectors, save for professional services in past few years have grown to offset this 5/
Manufacturing has seen productivity stagnate at all levels since 2008. This suggests more structural challenges - ones we'll be familiar with from high energy costs to barriers to investing. 4/
In financial services, the UK has seen productivity stagnate since the financial crisis meaning it has fallen back from the frontier. But this remains a relative strength with productivity above the levels of G7 peers. 3/
In info & comms the UK has shown consistent growth but the frontier has accelerated away in recent years (mainly due to US). UK continues to outpace other G7 peers. While most productive firms are growing strongly there is a tail of less productive ones falling behind 2/
🚨New report from us BCG CfG today🚨 we take a sector & firm view of UK productivity growth over past 3 decades, including benchmarking against peers. UK is falling back from global frontier but for quite different reasons in different sectors 1/
We think (happy to be corrected) this is the broadest & deepest study of its kind, building on existing academic work. We take a longer timeline & a wider set of different types of infra as well as a larger country group than ever before. For those interested in the modelling approach, details below
At a time of rising economic & geopolitical uncertainty, infrastructure investment is more important than ever to enhance prosperity, security and resilience. Read our full report below. 11/ ENDS www.bcg.com/publications...
As we’ve explained before, delivery is where value is lost. No one is incentivised to protect value across the delivery process. Need to get ecosystem right, then address common problems at portfolio & project level. 10/
How to pick the right projects? Link economic & social vision -> sector/place strategy -> choose the infra that unlocks those sectors -> sequence/prioritise (path dependencies, time to returns, supply constraints). Idealised version, more complex in practice but keep all in mind 9/
Despite this, countries invest very differently. Why? In our experience, governments struggle with two key questions when allocating scarce resources: 1) how to pick the right projects for their context, and 2) how to deliver them efficiently to maximise value 8/
In developing economies, human and wider physical capital are more significant drivers of GDP growth than infrastructure alone. This highlights the need for complementary investment. 7/
A 1% increase in infrastructure stock, in general, has a greater impact for developed economies. This is due to it equating to more in absolute terms and thanks to already highly skilled workforces. 6/
Higher-quality infrastructure yields greater results than “basic” infrastructure. E.g. expanding motorways in developed economies has a greater impact on GDP growth than regular roads (very relevant for those with aging infra stock) 5/
Developing economies see relatively larger benefits from transport infra. Rail and air freight (as a proxy for airports) have the greatest impact for these countries. Likely because many of these countries are more trade & resource focused. 4/
Energy & digital infra deliver largest long run growth uplift, but particularly true for developed economies. With greater economic complexity, energy & digital become relatively more important. 3/
We group countries into 5 archetypes based on level of development & existing infra stock. 5 key insights emerge from our analysis, with energy & digital infrastructure overall showing very strong impacts on long run GDP growth 2/
🚨New report from us @BCG 🚨. We look at 7 types of infrastructure across 92 countries over 30 years to understand their economic benefits. Key message: a +5% increase in infrastructure stock is associated with +0.3 to +0.45pp higher long-run GDP growth. This is huge... 1/ www.bcg.com/publications...
Good piece, well worth a read. The gap between reality & rhetoric remains large. I suspect part of the problem is that if you put to many leaders of middle powers that they should adopt a principled and pragmatic approach, most would argue that they already are!
Indeed, my feeling is that given some of the tensions & conflicts it quite quickly descends to a pick & choose approach on what suits them. Which is just to say, essentially the same as what most are doing now. I'm glad he called out what he did but sceptical in reality leads to a different approach
Hmm yes possibly, I did find it hard to square his view of "variable geometry" but at the same time "acting consistently. Apply the same standards to allies and rivals". I guess you could justify his China approach on the former, but it surely invalidates the latter.
But equally is Carney following the rhetoric in his speech? Agree with lots of it but I find it hard to reconcile with his approach to China. It didn't strike me as reflecting his call for principled approach protecting human rights & calling out allies & rivals on econ intimidation