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Rt. Hon. Peter Mandelson - Former Secretary of State for Trade and Industry (Jul 1998 - Dec 1998)The British American Chamber of Commerce |
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Thank you very much indeed, I think that was quite one of the most neutral introductions that l have ever received in my career which as you know, has been dogged by controversy since I first set out on that rather long, painful journey with Neil Kinnock to transform the Labour Party into a force that was capable of being re-elected - and so it was with a vengeance. It is a very great pleasure for me to be here: having spent all that time organising the message, now I am going to have the opportunity to deliver the message in my own right and I do so as a great friend of the United States. I have been an annual commuter across the Atlantic for my summer holidays which I have spent very pleasurably on Long Island for the last few years and I have for some time had a sort of parallel set of friends in New York and London who one day I shall take great pleasure in introducing to each other - we haven't quite decided the venue. It was indeed when I was sitting on my favourite Long Island beach this summer that I was reading none other of course, given my interest in a knowledge-driven economy, than Bill Gates' book "The Road Ahead" and a few weeks after my summer holiday I was closing a "Wall Street Journal" conference in London at which Bill Gates had in fact been the earlier speaker and he had been welcomed on to the stage with the most extraordinary, effusive praise, indeed I believe the words used were that "the entire human race had grounds to be grateful to him!" and after that, you can imagine my appearance was something of an anti-climax but I don't think that such ego deflation is necessarily a bad thing for a politician. Turning to the subject of my remarks tonight it has been a platitude for some time to observe that we live in an uncertain world and of course the truth of that is all around us for us in some cases painfully to see and what began last year as a regional crisis centred on a handful of Asian countries has now spread from Asia to Europe, South and North America and become a global problem affecting us all and how we respond to this problem in Britain and in the United States - and I do not believe by the way that we should be calling it a "crisis" for our economies yet despite the best efforts of the media - is of course critical. Looking inwards, trying to cut ourselves off from the rest of the world is not an option, we do not have that luxury and as Britain's Chancellor Gordon Brown, said in Japan last month, no one country can either escape its responsibility or be required to bear the whole burden with all the risks of protectionist sentiment that this would entail; burden-sharing in other words rather than burden-shifting is the way forward for us all. Slower world growth of course makes it inevitable that growth in the United States will be slower and in Britain, in the next year it will be more moderate but as a result of the tough and I think very decisive action that Tony Blair's Government has taken, the fundamentals of the UK economy are sound and I think we are well-placed to keep the economy on track for sustained growth. We will reap the benefits in other words, of keeping our nerve and maintaining this course while doing what is sensible to boost investment and stimulate fresh enterprise in the economy and for those who insist on remaining gloomy about the prospects for the economy I would just ask them to remember this: what the IMF and most independent forecasters are predicting is a slow-down in the UK economy, not a recession and coming from the peak of the business cycle as we have done, I don't think that is either surprising or undesirable. It is critically in stark contrast to the 'boom and bust of the late 80s and early 90s when British interest rates reached 15 per cent and a million manufacturlng jobs were lost. The phrase "SpeciaI relationship" is often used to describe the political relations between Britain and the United States but nowhere is the relationship between our countries more important than in the field of investment, indeed it is investment which critically underpins that special political relationship that we continue to enjoy. We each invest more in each others country than anyone or anywhere else. That is quite a big achievement. The United States British investment has created more than 9 million jobs and over the last four years alone US investment in the UK has created or safeguarded 400,000 high quality jobs and that is why I was so delighted to be able to visit the US so soon after my appointment to emphasis the importance I place on inward investment. Some thought that inward investors would be - perish the thought - slightly sort of frightened or made slightly nervous of a New Labour Government that might prove incapable of prudent fiscal management and would initiate a great torrent of employment legislation. Well how wrong they were! We have proved that we can take the necessary tough economic decisions and we have demonstrated that our plans for employrnent law reform do not usher in a return to workplace conflict and to the abuses of the past that scarred industrial relations in Britain in the 1960s and 1970s. Management must be allowed to manage and any reform will continue to underpin one of the most flexible and lightly-regulated labour markets anywhere In the industrialised world. I see the Government?s role as to provide a flexible, favourable business environment within which enterprise can conduct trade, win markets, create jobs and wealth. That is what attracts and generates investment. I am proud that Britain is the number one location for investment in the EU and I intend to keep it that way. The signs are encouraging. Last year was another record year for inward investment with over 600 projects won. In key industries such as telecommunications we offer a liberalised environment which no-one else can match; no-one else In Europe has done what we have done to liberalise telecommunications with over 400 licensed operators charging the Iowest costs to business of anywhere in the European Union. Only yesterday Ericcson announced that their headquarters for Europe and for Africa would move from Sweden to Britain - I think that is some achievement, another vote of confidence and another Indication that in today's uncertain economic climate Britain offers a low-risk environment for business investment. We have attracted twice as many call centres to the UK as any other EU country, 33 per cent of employment In call centres in the EU is in Britain compared to 8 per cent in Holland and 2 per cent in Ireland. We lead the world in companies using electronic breaker Interchange technology and are second only to Japan in the use of video conferencing and in software development our record stands comparison with the very best. We attracted the first Microsoft R&B lab outside the United States. All the world's top ten software companies have facilities in the UK and are continuing to invest and create more jobs, 1000 at Computer Associates, 1,000 at Oracle, 1,500 at IBM in the last year alone. But we cannot rest on our laurels. Gordon Brown's pre-budget report and my own statement of Government policy on competitiveness will this autumn set out the next steps in equipping the British economy to meet the challenges of the future There is indeed a great deal to be done. Across the whole economy, productivity in the United States leads the UK by some 40 per cent while France and Germany are 25-30 per cent ahead although of course with much higher levels of unemployment and of course non-wage costs and regulations much higher than in the United Kingdom. This productivity gap, however, will not be dosed overnight but neither is it an impossible task. Many UK companies are world leaders, major inward investors like Nissan achieve productivity levels that match those in Japan and over and again inward investors tell us that we have the best environment for business in Europe, one that will be hugely strengthened in my view by the new Governments concentration on education and training transforming the standards and the performance of our public education system and not before time either. Education and skills are absolutely vital because increasingIy the success of our business is going to be governed by one thing and that is knowledge; generating harnessing and exploiting knowledge and doing it quickly is the only true source now of comparative advantage. It is true for all companies, new young, old and traditional companies alike. We need to develop the capacity to innovate, generating new ideas, getting them into the market quickly and then doing it again and again and again. Continuous innovation is not only the flame of the game, it is the only game in town and we have to wake up to that even more so then we have already in Britain. My job in the UK is to make sure that all our companies, whether in manufacturing or services, are geared up to compete in this knowledge-driven economy. Easily said I know and I certainly don't exaggerate the role that Government can play but a number of factors support the knowledge-driven economy: We are constantly generating new knowledge in Britain through excellent science and corporate research leading to new product design and innovation and through new knowledge about markets and even human behaviour. Knowledge does not grow on trees, it comes from people and those people must be given the opportunity to develop, express perfect and test their knowledge. In Britain in the past our predecessors tended to neglect our country's knowledge base and we have reversed that. Amongst other thing:, a decision was taken earlier this year to inject £1 billion to revitalise the scientific research infrastructure in the United Kingdom, that is one heck of an investment but needed and timely. The key, though, is not simply to boost scientific and technological discovery, it is to transform scientific entrepreneurship as well. That is what is at the heart of my mission in the Department For Trade & Industry. It is both the most important and the most elusive challenge for us. Britain is great at inventing things but less good at turning them into business ideas and business ventures. Too often, products are invented in the United Kingdom but then manufactured elsewhere. We have tended to resign ourselves to this fate but the Prime Minister is determined that this fatalism should stop and it is my job to make sure that it does. To do that, we need more entrepreneurs in the British economy; they are the real agents of economic change because enterprise is the bedrock of a modem economy. At its crudest, enterprise could be described simply as making money but to make that money the entrepreneur needs to have an idea, see if them is an opportunity, find a means of financing it, making it, marketing it, moving it, selling it and in the process he or she is creating employment and creating wealth. Government must make this process as easy, accessible and effective as possible. We need to create and encourage serial entrepreneurs people 'who will continually seek to turn ideas into products and jobs. We need to create an environment in which businesses can learn more effectively'- from each other which is why I am joining with the Confederation of British Industry and other leading organisations to launch a campaign designed to spread best practice from the best to the rest, a campaign to make Britain fit for the future. We need to stimulate the application of information and communication technologies. We have seen a revolution in the way digitised knowledge can be stored and used. Our future economic success will depend on our ability to turn this information into commercial opportunity and the country's success will depend on its ability to offer a business environment that is conducive to on electronic commerce. I saw excellent examples this morning at the New York New Media Association and NASDA of how the US offers such an environment for electronic commerce and I want the same in the UK and we are already far up the track in creating that environment in which electronic commerce will prosper. We need to examine all our regulatory systems to ensure they do not needlessly deter entrepreneurs such as our bankruptcy laws. Are we sure that they create confidence in enterprise and commerce? I don't think we are confident. I think we need fundamentally to re-assess our attitude in Britain to business failure. Rather than condemning it and discouraging anyone from risking failure, we need to encourage entrepreneurs to take further risks in the future. Here In the US, I am told that some investors actually prefer to back businessmen and women with one or more failures under their belt because they appreciate the spirit of enterprise shown and recognise the experience that has been gained from it. Can you imagine that in Britain? Rather than sharing the risks with entrepreneurs in this way, most creditors are much more wary of supporting those who have experienced business failure, indeed many of them, including a lot of our high street banks, just run a mile from anyone who taken a leap, taken the risk, failed but wants to try again and those people should be backed. This really has to change as we build a new enterprising dynamic economy in Britain. We have to further remove the inappropriate burdens that stifle new enterprise. We must remove the barriers to financing, to flexible accommodation, to enlightened treatment by the taxman, unnecessary red tape, all of the other irritants to the entrepreneurs that when added together make them throw in the towel and head for the United States . There is absolutely no doubt that to effect change in all these areas will be a tall order but my aim is absolutely clear; we must build an economy that matches the productive strength and the vibrancy Of the United States, an economy where the pundits in the City and the media don't waste their time, as they do so often in Britain, debating the respective merits of manufacturing-versus-services but an economy 'which can beat the world at both and that is what I want to see, that is the way to create British jobs. So here I am, here to see 'what you do, then to learn how you do it' which is why I am heading off to California first thing tomorrow with a group of medium-sized British companies; how the clusters of universities, venture capital companies and high-tech industries have developed all over the United States and generated economic growth from the bottom up, lots and lots of little people and little links and little relationships and little bridges one to another many of whom become big and successful and create growth and employment In this economy, how you create it. The business environment in Silicon Valley that supports 20 per cent of the world's largest high-tech companies such as Intel, Hewlett-Packard which has created 200,000 jobs since 1992. That is what I want to see. Now, the New York New Media Association of Silicon Valley has attracted a membership of over 1,600 companies in just four years of its existence in this city. I intend, in other words, to practise what I preach, I intend to gain knowledge and then exploit it in Britain. I do not assume that the vision that I have for Britain will be easy to realise and nor will it be quick, of course it won't. Indeed l am thinking in terms of a programme of activity over the next ten yearn, voters willing - and we are not doing too badly. We have already begun on this programme, we have begun on this activity, strengthening our competition law in Britain, reviewing our priorities for export promotion, setting up regional development agencies to drive forward enterprise in the English regions and revitalising our key asset which is our science base. We have sought to encourage business to Work long-term and prepare for The technological challenges to come' and only last week, I sent one of my ministers to Ottawa to set out on behalf of all European governments a paper calling for a concerted effort to liberalise the global framework for electronic commerce but these are just the first steps. You have here an enterprise-oriented, risk-taking, failure-tolerant business culture that enables you constantly to innovate and constantly adapt to changing economic conditions and put simply, that is what I want for Britain too. This industrial revolution is based on knowledge and it has already begun. If we stand still for a second, we will be left behind and I do not intend that Britain should stand still a moment longer. |
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Other speeches by Rt. Hon. Peter Mandelson - Former Secretary of State for Trade and Industry (Jul 1998 - Dec 1998)
(the following are available from the archive) |
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