Other countries have done it, so why can’t we

We need bolder ideas for a faster-growing Britain, and our competitors will have no trouble in leaving us behind if we don’t go for it now.?

It's why CBI Director-General Tony Danker recently called out the government for lowballing the country’s ambitions, and missing the opportunity to break away from the low growth rates and flatlining productivity of the past decade.??

He proposed five radical policy shifts to help the government out of its current predicament of believing raising taxes is the only way to support high spending requirements. But he also pointed out that other countries had seen success in the past by deploying bold policies to target real growth – and our competitors are doing the same as they look to recover from the impact of the pandemic.????

“It’s amazing how other countries are moving fast on growth – and we’re falling behind,” he said.??

“We’re being wildly outspent by our competitors on green,” he added, as just one example of where the UK is shying away from placing big bets and risking losing its competitive edge.?

So which countries can we learn from in our pursuit of growth???

1. Singapore in the 1980s. Faced with their first recession since independence, the government overhauled the Singaporean economy. They reduced operating costs and cut corporation tax by 10%. They made big bets to spark investment: spending on infrastructure, new venture capital investment services, low-interest loans, tax incentives. The result? An average of nearly 6% growth per year.??
2. Estonia in the 1990s. Starting with a clear vision and clarity around funding, Estonia went after high growth through its digital sector. A digital overhaul of government and huge investment in new digital infrastructure and education has helped GDP per capita grow tenfold in the last 20 years.??
3. South Korea in the 2000s incentivised SME growth and foreign investment. It made a commitment to invest a fixed percentage of GDP into target sectors over 10 years to give investors confidence. In doing so, it managed to triple the number of corporate R&D labs and the number of venture capital firms increased tenfold in less than five years – with a corresponding boost to labour productivity too.??
4. Even now, under the banner of the Covid Recovery Fund, Spain has launched a huge €70bn digital transformation, while Italy has unveiled €191bn to overhaul their economy, including €55bn for net zero programmes.?
5. And continuing on the net zero theme, the US has already outlined plans for $800bn of investment in net-zero tech over the next decade, supported by trillions of extra stimulus investment. That represents around 3.8% of the size of the US economy in 2019 – and compares to just 0.55% for the UK’s climate funding.?

So, if other countries can do this, why can’t we??