In the following article, I have made
observations and drawn conclusions from a variety of recent reports (that I
have provided links to) produced mainly by independent leaders in their own
fields. These reports come from a mix of professions including renowned
Global Investment analysts such as Jeremy Grantham of GMO, economists, educators
and news reports mainly in UK, Europe or USA. One thing is for sure –
urgent and radical change is essential.
This has been a troubling year for the
UK Government with the slow realisation that economic
growth is unlikely while consumer confidence in the economy
continues to fade in the wake of ongoing spending cuts and inflation and wage
constraints that erode disposable incomes causing consumer demand for goods and
services to further weaken.
Moreover, as Europe
drifts into a double dip recession, the global economy remains weak and
shows little sign of recovery from the 2007/8
financial crisis, dashing hopes for substantial growth in exports to
emerging overseas markets.
Debt reduction or elimination becomes
the most sensible focus of attention on a personal and national level when credit becomes difficult
to obtain in a weakening and shrinking economy already overburdened with
debt.
The consequences of austerity measures
are beginning to be felt throughout the nation as welfare budgets are squeezed
and the poor and handicapped take on the brunt of austerity. But, this is
just the beginning – there is far more austerity to come as tax
revenues continue to steeply decline. The costs of unemployment benefits
are expected to rise with growing unemployment as more people in the public
sector are made redundant with continuing cutbacks.
More and more people will find it harder to find permanent employment as the
jobs in the private sector are just not there. Consequently, there will
be a growing trend towards under-employment by
those managing to only find part-time employment, as well as self-employment
and short-time job sharing in order that businesses can keep people in work
with much needed skills and experience until the economy picks up. In the
meantime, this is unlikely to fill HM Treasury coffers with sufficient funds
for some time to come.
As I have said before, in these
circumstances there is no way that the Government can afford to allow cheap
foreign labour into UK, whether they be seasonal workers or not, while there
are already large numbers of unemployed on taxpayer sponsored Government
benefits and the highest ever number of young unemployed in particular that are
perfectly capable of doing the work that economic migrants come over here to
do.
It is therefore essential that
we re-gain control of our
borders and prevent further migrations
from anywhere in the world and from Eastern Europe in particular
where new
member nations are shortly due to join the EU, in order that the settled
population of UK unemployed have the first opportunity for employment in
preference to economic migrants. To encourage this, benefits should only
be available to the settled unemployed on the
basis that they are prepared to study, train and re-skill for whatever
Government identified work opportunities arise in their neighbourhood.
This calls for a much stronger
partnership between local government, local businesses and educators that
clearly identify demand led skills required to expand and diversify local
sustainable economies for the long term.
This also means that our secondary
school system must better prepare
students and school leavers for the rapidly changing but practical world of
work with much improved career
advice and guidance relevant to the skills in demand in their local
economy. This should also include a more scientific approach to assessing
student aptitudes and attributes (strengths and weaknesses) followed by a
process to match aspirations with the individual’s education and skill
capabilities that suit particular career path local opportunities in order to
reduce time, effort and money wasted trying to fulfil unrealistic
expectations. Individual career choices must be realistic and
achievable from the onset. A much better understanding of the world
of finance and how to manage their life finances must also be an essential
part of school curricula.
None of this can succeed without clear
national and local government economic strategic direction and support in
partnership with local businesses, which should be constantly under review and
able to adapt as circumstances change. This presumably is the role of Local
Enterprise Partnerships in recently announced Local
Enterprise Zones. However, it is not yet entirely clear how these
organisations will work and what powers they will have to influence or
stimulate growth in their localities.
Meanwhile on a global scale, non-renewable
resource depletion continues unabated and growing
evidence suggests that, based on current consumption rates, we will exhaust
these resources well before the end of this century with dire consequences for
humanity.
With ongoing drought
conditions in North America, the devastation caused by Hurricane Sandy along
the Eastern US Seaboard and storms causing widespread flooding throughout UK and
Europe in November, Climate
Change is very much in evidence. Reliable scientific analysis
suggests that the frequency of extreme
weather events is likely to increase causing major economic and social
problems as well as possibly insurmountable financial problems within the insurance industry as storm
damage compensation claims become unmanageable and property insurance becomes
unaffordable for many people living in flood prone regions.
The combined effects of a prolonged
economic crisis, Climate
Change and accelerating non-renewable resource depletion
coupled to population
growth, herald growing insecurity
and the increasing probability of a catastrophic global food crisis.
With all this in mind, the political
preoccupation with perpetual economic
growth does not make any sense and looks increasingly short-sighted and
foolish. We will simply use up dwindling and already diluted finite
non-renewable resources on this planet that much more quickly and deny future
generations any resource heritage thereby ensuring the demise of the human race.
When will common sense prevail and a
more ecologically sustainable approach to economics be recognised as the only
acceptable way forward?
Strong leadership is required to
prevent a tipping point towards catastrophic change and a major step in this
direction came with the passing of the Localism
Act in November 2011. However, it will take a few years for
authorities and the electorate to adjust to new roles and responsibilities
before any results will be apparent.
Capitalism
as we know it in the West must adapt or perish. This, in conjunction with population
growth controls have become the most pressing issues
for all governments including that of UK which is an already overcrowded and
overpopulated small island nation that cannot feed its current population being
entirely dependent on imports to do so.
Food and energy security will
dominate our future in the wake of the impending Euro
collapse or downgrading of our own international credit
rating. The risks of this happening are too great to ignore and
urgent contingency planning is essential to ameliorate the high probability of
these events.
It is common sense that we should
massively reduce our vulnerability to long and complex international food and energy supply chains
by developing local resilience. This can be done by ending a century of
centralisation and expanding and diversifying local economies, as also
recommended by Lord Heseltine in his recently published report into boosting UK growth that could
help reduce our dependence on imports generally and so improve our balance
of payments.
It is now time that UK manufacturing
in China is repatriated
back to UK, just as is beginning to happen in USA.
These are the only areas of short term
economic growth that our politicians should be concentrating on which must
focus on small and medium size businesses that our economy depends on.
Not the large and often predatory international players that tend to avoid
paying their fair share of taxes and thus have an unfair competitive advantage
over smaller UK based firms.
New decentralised local energy, water harvesting, food production and
distribution systems are essential to our survival when our older technology
centralised utility systems come to the end of their design life cycles, begin
to fail or cost too much to maintain or upgrade. Communities with
multiple and diversified distributed utility systems and local food production
and distribution channels that substantially reduce food miles (now in
excess of 30
billion kilometres per annum) are by nature less vulnerable
to failure than single large high output centralised systems that impact large
populations as and when they fail.
New advances in energy
storage batteries may soon enable off grid storage of intermittent
renewable energy that every household or community
local grid can take advantage of, especially those households or industries
that have installed rooftop solar
panels.
Rigorous energy conservation and
energy efficiency also present business opportunities that have great growth
potential within the economy. This includes effective home
and work place insulation (including shops and factories), zero
carbon new housing and LED
lighting installations.
Commuting daily to and from work
consumes about 50% of our energy needs and therefore massive savings can be
made by allowing people to work on line from home now that fibre optic Internet
and video conferencing services are becoming common place. Most London
commuters I am sure would welcome this, especially if the companies they work
for allow local team hubs to form in remote locations from their central head
offices.
New 3D printing technologies
have the potential in the medium to long term to enable local cost effective
manufacture and production of whatever is needed thereby hugely simplifying product
distribution channels and reducing freight miles by replacing remote
centralised mass production with custom local production where and when it is
needed.
It is essential that every facet of
business moves away from the traditional brittle centralising model dependent
on vulnerable and complex long supply and commuter chains to a more resilient
distributed local model for the 21st century and beyond. The
sooner this is done the better it will be for everyone as this will at the same
time ensure a fairer and better distribution of employment, wealth and power
throughout the nation!
