Anonymous 1 needed this 'Off the Record'

Just as an addition to my last post.

Do you think the lost Bombardier contract decision was the right one?

Prof Eman.

Stil on Life Support
Thank you for your contributions at #130.
Norway. Your explanation is correct in many ways, but you appear to have missed another very important point.
GDP by Sector- Agriculture ~2%, Industry ~40%, Services ~58%. Ratio of Industry to Services just 1:1.5.
And, another question-What have we done with our North Sea Oil? What impact has it had on GDP, and our preparations for the post North Sea Oil era.
Switzerland. Agriculture ~1%, Industry 28%, Services 71%, significantly lower than ours.
The overall thread is that the lower the Services the higher the GDP, and economic growth rate.
The higher the Service the lower the economic growth rate. eg. USA, GB, PIGS.

Prof Eman

More managerial incompetance through lack of engineering expertise. Edinburgh used to have trams, from 18 something until 1956, someone decided to pull everything out.
Recently a group of local council jokers decided to put them back again.
Big fiasco, spent 400 million and little to show, going to cost 1 billion.
Awarded to a German consortium because no one in the UK could lay tramlines any more, nor could they build the trams,they were made in Spain.
Zero engineering expertise at the top, and just below the top, and just below that. The blind leading the blind.

Prof

Still not convinced that the service sector is the driver of GDP growth. It may be an influence but far more important is the combined level of public and private debt. In times when debt is cheap such as pre 2008, having high borrowing leads to phenominal growth (think Ireland in the years 02-07 beating the rest of Europe) but when debt costs rise rapidly such as post Lehmans in 2008, then high debt acts as a drag.

This would explain why Japan, which has a huge manufacturing sector but has experienced low or negative GDP growth for 20 years. Debt in Japan is more than 200% of GDP and this has driven relative borrowing costs higher (see JGB yield).

On the flip side of this, places like Singapore who has significant service sector but low debt has maintain high steady GBDP growth for many years.

Think the service to manufacturing balance may be more of an influence over the sensitivity of GBP growth to changing environment, rather than its outright pace, as services are usually able to react more quickly to the economic cycle, increasing or decreasing capacity and output far more quickly that manufacturing due to the lower reliance on plant and higher reliance on labour, a more flexible factor of production.

Therefore, seems to me that debt affects outright GDP growth in diff environments, but sector split affects the volatility of that growth.

Exception to this is China, where growth is driven by incredibly low productivity per unit of labour, so dramatic increases in productivity feed into headline growth.

Anonymous 1 needed this 'Off the Record'

Dear all
Just want to summarise our discussion to-date.
It started with Making stuff v Banking and Financial Services, expanded to Services Sector, expanded further.
WE tried to identify some root causes/issues, and I was staggered to find so many-
Here are some of them-
Education, Poor Management, Cultural attitudes, Wild swings in interest rates & taxes (make corporate planning difficult), Parliament and regulators permanently asleep, low priority of science and engineering,Wild swings in Govt policy (wrecking our entire infrastructure e.g connecting our water works), Excessive public sector, Lack of awareness of cost/benefit ratios, excessive requirements for due diligence, Lack of competency, skill, expertise, the system itself, Problems with technical skills, level of maths and computer science, Short termism (short term gains v long term benefits), Lack of proper reward for engineers, inventors, manufacturers, researchers, inadequate skills based training, difficulty of sacking incompetent staff, the pension problem, funding issues, Reorganisations mania and political footballs e.g. Education, The ever increasing pay gap between the average reward and top salaries, accumulated mountain of debt, industry/manufacture/engineering-under-represented (inadequate Parliamentary lobby), Services getting too much of the national pie, better teachers required, need to motivate apprentices, Lack of confidence/trust, Lack of automation/robotics, MP's with wrong backgrounds/experience making decisions, Lack of Engineering efficiency, Need to break the welfare generation, Teaching of moral philosophy required, Poor early childhood development, Poor adult learning, Lack of skills/training in science and technology, Lack of shareholder clout, Excessive influence of the gutter press, Grossly overpaid individuals, Not adapting to change, We should make better and more advanced stuff than our competitors, Lack of status of the engineer (poorly paid), Chronic underinvestment, Poor working conditions, Inadequate Govt help/assistance, No broad based engineering infrastructure, Need to recognise a social infrastructure in the UK that recognises practical cleverness rather than intellectual brightness, Give Engineers the status they deserve, Even our new wind farms are made overseas, I treat all political parties with the same contempt, The thread is Education, Education, Education -But how to improve it? Engineering degree-hard graft for no reward, Immigration issues, STEM/Triangle Coalition issues, Return to HNC/HND type of education required or/or foundation Degrees, Education succeed in passing exams not to learn,
I think this is a tall list for any Politician. In fact presented with this list, I would think twice before becoming one.
However, any chance you could look at it and identify in order of priority, ten that could be tackled in the short term, i.e within a year or two and ten that should be addressed in the longer term.

Prof Eman