The UK economy is something of a puzzle. It's hard to tell whether it's a success or a failure. On the one hand, compared with many of our continental European neighbours, unemployment is extremely low. Over the last decade and a half, economic growth has been vigorous and steady, notably unpunctuated by periods of stopgo, as in the past. Likewise, inflation seems to have been brought under control by the firm hand of the independent Bank of England. Swathes of the public sector have been unleashed from the sway of official bureaucracy through privatisation or by metamorphosizing into independent agencies.
Deregulation of wide areas of the economy is paralleled by developments in the labour market. Trade union power has effectively been broken. Just 18 per cent of the private-sector workforce belongs to a union, and only 40 per cent of employees are covered by collective bargaining. The UK prides itself on, and staunchly defends, its labour-market flexibility. Tripartite institutions for training or sector planning were long ago abandoned. Adding all that together, the UK ought to be a manager's paradise. Successive governments have ensured that uniquely, at least in Europe, its field of action is almost unbounded. According to the OECD, in terms of both product and labour markets, the UK ranks with the US, New Zealand and Ireland among the most business-friendly economies in the world.
Yet at micro-economic level, the rewards of business-friendliness have been disappointing. Instead of bursting into a sprint, UK companies have mostly stayed anchored to the back of the field. Exposed to the bracing winds of competition, many UK sectors and firms have responded not by revelling in their entrepreneurial freedoms, but by quietly shrivelling away. The lingering death of Rover is just the latest example. More than one million manufacturing jobs have disappeared since 1997. UK companies still invest less in R&D than their competitors abroad. And on the tell-tale, talismanic measure of productivity, while UK firms have stopped falling behind, they have been unable to make up the long-standing gap with their chief rivals: around 20 per cent for Germany and the US in terms of output per hour, and 35 per cent for France.
There's a further twist to this conundrum. Since the first UK business schools were set up in the 1960s, they have become higher education's most conspicuous postwar success story. There are now more than 100 business schools, and altogether at the latest count 140 university-level establishments teaching business and management in some form.
...the UK ranks with the US, New Zealand and Ireland among the most business-friendly economies in the world.
More undergraduates take business studies than any other subject, and the UK is also one of the world's largest providers of postgraduate (MBA) business education. Business education accounts for 15 per cent of all university activity.
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