In the UK we it is true to say that we are historically a great global trading nation, taking full advantage of our favourable geography, time zone and pushing a kind of soft power that belies our size.
That was until recently where I fear this lax and slightly lazy myth has prevailed and failed to recognise our standing is diminishing year on year and we risk falling into that favourite position of the underdog. One that works well in popular culture but less so in economics.
Put simply our tax regime is too high and the costs to both individuals and business, which now damages our competitiveness. This is evident across the board – from Duty and VAT rules for international shoppers, who are now buying in the EU and not the UK as a result, to our people & businesses looking to leave the UK in search of more attractive tax regimes in other parts of the world. Easy global travel and internet-based working makes living elsewhere in the world far more possible and brain drain is the result.
Business continues to buzz in the USA after Donald Trump’s victory.
Getty Images
The UK has not done enough to understand this and try to provide solutions. Even the briefest look at the movements of millionaires globally shows that the UK is suffering an exodus. Mainly to the competitive markets of the USA and UAE. I hope that the UK Government will wake up the reality of the new trade routes and developments globally and find a way to develop a more competitive economy to be able to better partner, especially with both the UAE and the USA as technology and innovation sectors grow and look where to grow from.
I spent much of last week in New York and Washington DC, the excitement is palpable. Business is buzzing about the possibilities. The business community is living in expectation of a period of simpler regulation and potentially lower cost base as a result. This can lead to more growth, more investment and more innovation. The market is excited about what that may mean, even if there is a little uncertainty over the shape it will take. The knowledge that there is someone coming into the White House who has been in business and understands what business needs means that businesses across the USA can be positive with hope of what the next few years can mean for US competitiveness and opportunity.
We need to learn from this and understand why sentiment like this can drive business and what we can be doing to match this across the UK.
Peter Mandelson has been appointed as the new ambassador to the USA.
Getty Images
Globally we are also seeing new trade routes being created with the Middle East and Indonesia with these also being areas of exceptional opportunity and growth, well beyond what we see in the UK alone and we need to be clearer about that and more honest with ourselves in the UK.
With a new US administration coming in the New Year there is an opportunity. We will see a President take office who has been in business longer than he has been in politics, he knows the value of letting business grow and to create jobs and opportunity. Expectation is that he is going to be focused on ensuring the USA is at the forefront of the new economies and opportunities. The UK should be considering how it can partner in these areas and develop alongside our friends in both the USA and the UAE and beyond.
A look at a range of indicators shows that sectors and investors currently see the UK as an unattractive place to invest. Any time spent in the UAE, or the USA and further afield in contrast sees excitement about opportunity and growth. The plans to utilise and deliver for people via AI and wider technology is tangible. The ability to develop and build a business with such a dynamic competitive market appeals to people.
Sadly, in the UK, despite our great research opportunities we are not delivering on the application side of R&D in this area. We have a regime that does not facilitate fast growing and fast moving technology. Our regimes lean towards what we cannot do, when we should be thinking about creating a system that looks at how to facilitate innovators to find out what we can do, what can be achieved and test the boundaries.
The special relationship between the UK and USA is alive and well.
Getty Images
In the new internet driven world, more people can, even in remote areas, have the ability to interact, to trade and to develop ideas and digital technology and to commercialise it. This can be transformational for individuals and for communities and countries, including the UK.
We can be excited about the future for the UK and its long standing partnership with the USA. It has always been described as a special relationship, one based on good personal relationships as well as security and defence alignments, we now in the UK need to think about how we build into a special relationship economically with our friends and partners around the world as well.
To do that, we need to be honest with ourselves about the challenge we have to get there, both in building on good relationships based on trust , as well as respect and to move back to an economically competitive place. We need to ensure we are in a position to attract sectors and companies to see the UK as a good base. That may require some courage and a different approach from the past from our own government; the prize for our joint future is worth it.