At last, it seems that after years of the celebration and then ritual flogging of the financial services sector, we have the first hint of recognition for another powerhouse within the UK economy…knowledge. Or to be more specific the sector now being lauded as the answer to the UK’s economic woes is…drum roll please…professional and business services.
This week the Work Foundation, an influential UK based think tank, urged government to think a little harder about the merits of the ‘brains and expertise’ sectors currently employing some 3.2 million people or 11% of all jobs in the UK. Over the past 20 years, this secret success sector of the economy, including legal, accounting, IT, management, property and PR and marketing consultants, has quietly got on with taking responsibility for over 20% of UK output.
This largely ignored part of the economy overtook manufacturing in terms of output sometime around the turn of the millennium, and has roundly thrashed the financial services industry in terms of output every year without fail since the early 70’s.
The brains, ideas and advice sectors are not confining their success to these shores either, exporting over £20 billion worth of knowhow during 2010. All this begs the question, why has the sector gone so unnoticed by the politicians over the last 30 years? Well in short, Britain as a nation of thinkers and advisers is dull. We like to cling on to the fact that we still have some manufacturing in the UK, hoping above hope that each new technology park or development zone will help boost our economy by offering large swathes of jobs. We, quite rightly, get excited that we have pockets of excellence in manufacturing, such as the Formula 1 industry…but the thought of offices full of intelligent souls in suits driving the economy by selling their brains leaves us cold.
Well, I’m with the Work Foundation; I think it should be celebrated. We have some world leading lawyers, accountants and marketers in this country and they should be applauded for the contribution they make. We have a thriving industry of architects , engineers and management consultants and all should rightly be patting themselves on the back for a job well done.
We all need to thank these people for their contribution and nurture them carefully. And the Government must listen to the wise words of the Work Foundation, so Mr Osborne, think carefully before you introduce knee jerk high taxes or drive down the price of Government outsourcing contracts too far, because our knowledge economy is precious to our recovery and we don’t want to scare it into packing its bags and setting up stall elsewhere.