Knowledge economy is the answer

Britain is setting a new record every month but there are no reasons to cheer. Many more than a million people have been made jobless in the three months ending October. This despite all the tall talk of David Cameron and George Osborne that the British economy is gradually getting to terms with the new economic reality. What is more worrying is the continuous rise in youth employment, which now has reached a new height of 1.027 million.

The figures on rising unemployment (and also rising youth unemployment) were announced on the day when a BBC Radio 4 poll shows that parents in Britain are losing control of how their children behave. The survey also suggested that more than three-fourth of people interviewed think the way parents raise their children in Britain has deteriorated in the past decade.

Both the findings are seriously worrying for Britain but do we have reasons to equate them?

There is a structural side to the woes Britain is facing economically. The global economic balance has now significantly shifted towards Asia with the rise of  China and India. Technological changes have made sure that the chain of production continues uninterrupted. Abundance of labour force in China and India have transformed these two countries into global production houses. The huge internal markets have not only stretched the innovative and productive capabilities of the domestic industries and service providers there but also lured foreign companies. Anxious parents of school going students are now abandoning Latin and German for Mandarin and Hindi. 

The number of products and services that Britain can now sell to the outer world are very limited. Even its internal market is dominated by cheap Chinese, Indian, Malaysian and Indonesian  products. Large number of immigrants and a significant floating population are also draining out a  proportion of  British financial wealth outside its national territory. Dadabhai Naoroji had attributed India’s poverty to the drain of resources by the British. Had he been alive today, he probably would have been very happy to see some form of a reverse flow.

Britain has sacrificed its manufacturing heartland, citing the rise of  The City as the global financial capital. The so called British supremacy of the financial world is also not without risk and challenges. The neglect of the real economy in favour of  financialisation has created a pool of  workforce who have nothing to offer nationally and are also unable to compete globally. This is probably where Radio 4’s findings call for serious introspection.

"Three-fourth of the parents surveyed admit they have no control over their children’s behaviour and 65 per cent of the respondents blame the teenage gang culture on poor parenting". My hunch is that a survey on primary and secondary school teachers would have produced nearly similar results. Britain has chosen libertarianism overlooking the importance of discipline in individual life.

Given the decline of British manufacturing and the tumbling of the British financial empire, it seems Britain can now rely on the knowledge economy  (using knowledge as an economic good). Even today  thousands of  foreign students make a beeline  for British universities, which are still considered to be of global standard. But for the knowledge economy to deliver, Britain first needs to look internally and assess the standard of primary and secondary education that are on offer as compared to other leading countries of the world.

A meaningful engagement with the youth is necessary for Britain to brave the current social storm. This can take place by inculcating a sense of belonging among the disenchanted youth and impressing upon them, right from their childhood days, the virtues of  modern life and the challenges that lie ahead. A way out of the social mess is likely to halt the downturn of the British economy.


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