This country has been a bad investor since 1929, its been a long-haul malaise its true but that’s got a lot to do with economic theory developed at that time and adopted by governments on both sides of the house.

In my view the conservatives do a bad job, labour just do worse.

I’m not saying that tax rates and regulation don’t have an impact: of course they do. I’m just saying that the state of British business cannot be entirely blamed on the machinations of a high-tax Labour Chancellor. Domestic business also has to shoulder its share of the blame.

This flaw is revealed in the eschewing comments…

The ideal scenario is, as has been pointed out above, to increase productivity through re-investment. However this reinvestment must come from existing profits after expenses and taxation. This government has :

1) Increased taxation on both the business and the employee.

2) Increased expenses through legislation and “red-tape”.

This reduces the business’ ability to realise its productivity improvement goals even if the innovative inspiration is present. Adjunct to this, high personal taxation discourages personal motivation within the workforce.

Save us the Tory bashing will you please. This government is utterly incompetent at running the economy and this country is only doing so well because the fine people of this nation are gifted and hard-working, but governed by asses.

John – I really don’t think I made any ad hominen attacks on you, I merely wondered if your debt investment was worth it. Given that you went to Cambridge that has to be (provisionally) a plus where-as a degree in psychiatry from Bogchester Uni probably would not. You have made your economic and life-style choice of being a poorly paid hack and I neither praise nor condemn, if it suits you, then that’s all that matters. However, it does no good to complain about the outcome – it was your choice. (I have some sympathy, I chucked in, an admittedly not very promising career as a trainee architect, to become a squaddie! Crap decision, economically, but I loved every minute of it.)

I missed ‘H20’s’ comment #19 to which I will give brief replies:
1: Yes
2: Yes-ish
3: Yes-ish but I do not accept that decisions taken at the level of one company will affect the *national* economy.

However, I will grant you this; if the education system is poor then generations of managers will grow up and rise up whose average intellectual ability is poor. This would (and does!) affect the national economy but just ask yourself who is in charge of the education service?

‘Reverend’ – the good Lord rejoiceth at every sinner who repenteth (you can see how long it’s been since I went to church! And don’t worry about the odd biff and bash, it’s all part of the fun.) Of course there is a limit to how much ‘flesh can be cut from the bone’ so please put away teh hammer and nails. However, it really was surprising how much was cut from previously nationalised businesses in the time the Blessed Margaret, and very many huge international businesses, as well – one thinks of IBM. But productivity went *up* in all those concerns as a result.

But I did quote a couple of surveys from reputable sources to back up my argument. Surveys have found that

a) British management doesn’t compare well to that of many other nations; and

b) our business investment rates have often been lower

The interesting question, to me, is why this should be. I think if we could answer that we’d be a long way towards closing the productivity gap.

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After all the talk, I don’t think the original point of the article has really been taken any further.
The original contention was that “business” needs to put its own house in order instead of instinctively blaming hte government for any ills in the economy.
John posited that the two major problems with British business were poor management, and low productivity.

For the former, I pointed out that a bad manager in the Treasury or the DTI (purely hypothetical, you understand) would do a lot more damage to the economy as a whole than one in a single company, and is just as likely. So the more a government interferes, the worse.

The latter he basically blamed on greed and short-termism, suggesting companies were giving too many profits to shareholders and not putting enough into r&d etc.

That’s a common criticism, but it’s a bit glib. You don’t need to be a genius to understand there’s a need to reinvest in your business. So unless the quality of managers is even worse than the survey quoted suggests, and 98% of them are thick as shit, it might jsut be that many of them are, to an extent, making a rational decision not to invest.

To move the discussion away from definitions of productivity (if that’s ok by you Duff – the REv’s last post kind of nailed it), WHY do many British firms feel it isn’t worth investing in R&D in this country? I’m not saying I have the answer, or that it’s neccessarily the fault of the government, but I think it’s a valid thing to ask.

I speak as an Engineering M.Sc. (1st degree in Physics) who works no longer….