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Outline the evidence presented in the data which suggests that the UK has lost international competitiveness in recent times.

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The UK's International Competitiveness 1.) Outline the evidence presented in the data which suggests that the UK has lost international competitiveness in recent times (10 marks) As figure 97.11 shows, there was an overall decline in employment in tradable goods and services in all regions of the UK apart from the South West, South East and East Anglia. The tradable goods and services included agriculture, mining, manufacturing, external financial and business services and the armed forces. With the index being 100 in 1971, employment in tradable goods and services decreased to 85 by 1988. This then rose to 87 in 1992 but then fell again to 81 in 1998. So overall employment in tradable goods and services fell by about 19. However, there was also a decline in employment in non-tradable services. During 1971-1998 the graph shows fluctuations but the decline was not as dramatic as tradable goods and services as overall employment in non-tradable services only decreased by 3 from 100 to 97. Figure 97.12, the innovation index of 1996, shows that the UK came 13th out of 17 industrial nations in terms of its ability to derive commercial benefits from science and technology. The innovation index is based on factors such as number of patents granted, inventions and research and development. The low rank in 1996 is due to the UK having only 87 international patents per 1,000 scholarly mentions of scientists' work during 1975-1995. ...read more.


As well as increasing the importance of innovation, increasing the returns to products with a large knowledge component is the way businesses are competing. These developments lead to a crucial role for entrepreneurs in identifying and exploiting the economic opportunities presented by rapid change. Also for investors, who may find companies' wealth-creating potential increasingly tied up in intangible assets such as the knowledge of the workforce. The White Paper, released by the Department of Trade and Industry suggests that in order to achieve economic prosperity in the future, we require: - the capacity to exploit science and technology - enterprise and innovation - people and skills - collaboration between companies operating in networks and clusters - greater competition to increase innovation and consumer choice Due to the strength of the media, entertainment and financial services, the paper says the UK is in a strong position in many areas of the knowledge economy. Also, if the government wants to promote economic growth and stability they need to be aware of the need to develop - the skills of the science-based industries, technology, innovation and effective capital markets are all required. As mentioned before, the increase in knowledge-based employment and exports, expresses the importance of knowledge to the UK. For this reason, the composition of UK output is already changing to reflect this and it could help restore the UK's international competitiveness. ...read more.


This could be seen as an expression of the government's unwillingness to think big. Bereft of any big ideas about the economy, the baton is being handed to individuals, who, on the whole, have the least power in the economy. Another problem is that the promotion of entrepreneurship goes beyond its very narrow economic focus. It is quickly becoming a new form of social engineering. For example, the Democrats' idea that 'schools should be encouraged to experiment with different approaches to blur the lines between formal education, work experience and entrepreneurship'. It could be argued that children should be left alone to study Maths and English and to let them enter work when they are adults. People used to be worried about small businesses surviving but now there are about 23 million out there. Since our economy is rapidly changing it creates new opportunities for small business owners everyday. New technology has opened thousands of new opportunities and especially with the internet making a small business available to thousands of people around the world. The impact of Entrepreneurial companies has been beneficial as about 600,000 new companies are incorporated every year. Small businesses employ more than 50% of the workforce and generate more than half of GDP. Nowadays, entrepreneurs are presented as the most creative, innovative and dynamic section of society, and increasingly courted by the Labour government. If UK chancellor Gordon Brown gets his way, entrepreneurship - the fostering of entrepreneurial activity - will become central to economic policy in the coming years. ...read more.

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