British business getting left behind

Jun 12 2006 by Nic Paton Print This Article

British businesses are at risk of losing out to developing economies not just in terms of unskilled manufacturing labour but also in the more highly skilled areas of research, management and engineering, a panel of experts has suggested.

The Question Time-style seminar on the issue of "Is Europe Still Open for Business?" was organised by insurer Atradius.

The poor quality of the UK's general education, along with the high quality of graduates from India and China either going home to set up business or increasingly graduating from their own improved universities, would create a significant talent shortfall in the UK and other European states, the panel concluded.

Within only a few years, the UK would be importing key skills to maintain competitiveness, it argued.

The panel also agreed that China's emergence as trade super-power appears almost inevitable.

Even if, or when, the Chinese government stopped bankrolling enterprise, it was likely that there would be enough momentum and foreign investment to fuel continued growth.

The UK was also felt to be lagging behind its European Union counterparts in terms of management skills and education.

Managers in many other EU countries were highly educated, fluent in a number of languages and with an excellent knowledge of the legal and regulatory implications of international trade.

UK managers, by contrast, still tended to rise through the ranks, with little or no language skills and only a "need to know" knowledge of global trade.

The panel argued that the gap between the government and business agendas in the UK was partly to blame.

The government's apparent lack of support for export business was felt to be a significant obstacle.

Equally, it was felt that the UK Government's concentration on encouraging inward investment was a more risky strategy.

The panel cited the recent decision by Peugot to close its Ryton, West Midlands plant was felt to be evidence of the UK's decreasing importance as a head-office location.

If, as was likely, more companies followed suit, the accompanying economic effects may be felt in a number of different sectors, the panellists argued.

Having been a political and business hot issue for many years, intriguingly, the panel felt the euro, and whether the UK adopted the currency, was not really an issue.

Although a single currency brought greater transparency and decreased exchange rate risk, there were also trade partners that still preferred to buy and sell in sterling.

The seminar hosted by the BBC's Jonty Bloom, with panellists including Marc Jones, senior underwriter at Atradius, Bernard Dennis, a leading export consultant and Philip King, director general of the Institute of Credit Management.

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