Business education could reboot the UK economy
Michael Mercieca blogs for Huffington Post UK
Michael Mercieca writes:
“According to a new report by the International Monetary Fund (IMF) published this week, we’re all in big trouble. Western economies’ growth rates have left the motorway and are now stuck behind a big red tractor on a single-track road – with no passing places. Potential employment growth is set to decline and low productivity means government and private debt will be hard to reduce.
So what’s going on? It’s no secret that we’re all facing what the IMF snappily calls ‘a demographic crunch.’ In some developed countries such as the UK, the total proportion of people working is going down as birth rates decline and we all live longer (hopefully). In other economies such as China, India and Turkey, the proportion of people working – the participation rate – has reduced as people get richer and choose to spend longer studying or less time working. Indeed in Russia and China, potential employment growth fell by 0.2% every year between 2001 and 2007. That represents a lot of Chinese and Russian people who could be contributing to global growth who are choosing not to.
Productivity growth is slowing down worldwide, that’s a fact, and it’s something the majority of us are just not used to hearing. We’re conditioned to believe that emerging economies in Asia have huge growth rates and always will because, well, they make stuff – and lots of it. But the reality is that their productivity rates have been slowing for some time, which limits how fast they can grow so in Asia, at least, barring any significant technological advances, exponential growth rates are unlikely to be seen ever again.
But what about in the UK? In advanced economies such as ours we’re also used to boom – and bust. We have just had a bust, so boom is next, right? Not so this time. The rapid productivity growth of the late 1990s and early 2000s is now gone, possibly for ever.”
Read the full article on the Huffington Post website.