Unfortunately, you can’t just wish your way out of a recession, or work harder, you need to innovate.
The truly, truly, truly, wonderful recent idea, that Greece’s economic problems would somehow be improved if people worked on Saturdays, is perhaps the most ridiculous of the myriad inane comments that our political leaders have come up in response, if you can even call it that, to our current economic difficulties. It is nearly as daft, but perhaps not so obviously so, as the idea that all the UK needs is to do is to produce and export more. The question echoing around the country ever since our current government announced that is how they would transform our economy was, produce and export what exactly? Of course, they have no idea; they seem to think that is “Industry’s” problem.
You cannot just create demand from a good intention, or by working harder; demand follows attractively differentiated benefits and in our technologically pacy world they tend to be driven by novelty, invention and innovation. That is why Apple is the biggest business on the planet these days and that is also why Dyson have just announced great results too. The Dyson group achieved annual turnover of over £1Bn for the first time in 2011, having doubled revenues in the last few recessionary years; it has also reported an EBITDA margin of just over 30%.
My generation called a vacuum cleaner a “Hoover” but Dyson is doing a pretty good job at supplanting every other brand in today’s popular mindset, with its innovative and stylish machines, but its arguably even more radically designed fans, that only went into production in 2009, have contributed a third of the group’s year on year growth. With good build quality and five year guarantees it is arguing that in difficult times people are going for quality; this is great PR and possibly true for its target segments, who can afford to invest in stuff, but that has never included the poor.
Dyson is a business built on a continuous innovation philosophy and so it continues to invest heavily in R&D and employ the best engineers from the small resource pool that exists in this country. Its eponymous founder wants the government to support engineering education, in particular post-graduate students, in order to build an even stronger indigenous resource base for industry. By the way, what the hell happened to that Manufacturing Tsar that the government was on about six months ago? (See my ramblings from February 2012 on the subject http://markballett.com/do-we-need-a-quiet-tsar )
The problem with most western economies is that politicians rarely engage with the underlying problems of the real economy, the bit concerned with producing stuff, as they are mesmerised by the short term wonders of their financial friends and they want to hang onto power so focus on short term issues. To really prosper most western economies need: better education for the majority; to give much greater status to teachers and educators, who need to be much better trained in the “innovative arts”; and we need to elevate the status of engineers too.
Sadly, this has been debated for decades and it is never likely to happen in a serious way as there are too many interest groups who don’t want it to happen. In western economies it will always be left to the entrepreneurial heroes, like James Dyson, to make a real difference. Now, if James Dyson was Prime Minister, things may be different: what about it James? I, for one, would vote for you.
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