Re:Britain poised for third phase of industrial revolution
by fauigerzigerk on Sunday November 07, 2010 @03:10AM
(#1879002)
Of course "glorified hedge fund" is an exaggeration and the UK does have pockets of innovation in industries like biotech. Services is 75% of GDP, 10% of GDP is financial services in the narrowest sense. That's compared to 7.5% in the US and 3.8% in Germany. How much of that huge services sector is linked to financial services? My own observation is that about half of all IT jobs in the UK are related to finance. I think it's fair to say that the value Britain adds to the world economy is dominated by investment banking.
There are historical reasons for that, but the extremely lax approach to regulation plays a huge role as well. The UK is where hedge funds and investment banks from all over the world go to do the most daring kinds of gambles. AIG was the biggest insurer in the world. Their small London office bankrupted the entire company. Why was that office in London instead of New York?
But my point is that any claim that the UK is leading the world in terms of a new type of knowledge driven, highly automated manufacturing model is completely delusional. It just doesn't exist outside of a few speeches David Cameron gave during the election campaign. Britain is not even on the map when it comes to technology.
I don't know if this is a big problem. Maybe the world can sustain a few bloated financial centres and will do so for a long time to come. But if it turns out that finance as a share of world GDP has peaked, then the UK is in a very dire situation, arguably the worst outside if Iceland.
There are historical reasons for that, but the extremely lax approach to regulation plays a huge role as well. The UK is where hedge funds and investment banks from all over the world go to do the most daring kinds of gambles. AIG was the biggest insurer in the world. Their small London office bankrupted the entire company. Why was that office in London instead of New York?
But my point is that any claim that the UK is leading the world in terms of a new type of knowledge driven, highly automated manufacturing model is completely delusional. It just doesn't exist outside of a few speeches David Cameron gave during the election campaign. Britain is not even on the map when it comes to technology.
I don't know if this is a big problem. Maybe the world can sustain a few bloated financial centres and will do so for a long time to come. But if it turns out that finance as a share of world GDP has peaked, then the UK is in a very dire situation, arguably the worst outside if Iceland.