"...At the Bank of England they are scratching their heads. Across town at the Victoria Street offices of Vince Cable's Department for Business, Innovation and Skills there are the same perplexed looks. Everyone is asking why UK businesses are unable to export their way out of recession.
Last month, manufacturers were especially gloomy about export orders. The purchasing managers index (PMI), an important monthly snapshot of manufacturing activity, collapsed to an 11-month low of 50.8."
So why can't Britain export it's way out of recession
? Um, the answer's pretty obvious. Unless the British people are ready to accept wages lower the Bangladeshis--or until they can spark the industries of the future, for which the world is ready to pay a steep premium, then exports are a non-starter. It's not just about making stuff. It's not just about--for developed countries--about making more cheap stuff.
It's about making the stuff of the 21st century, as I've been discussing on my HBR blog. Developed countries don't have a clue how to do that--because they're still basically industrial age economies, clothed in slightly more fashionable outfits. But take away the superficial gloss, and what you're left with are economies that still churn out reams of toxic junk, whose basic economics--borrow to the hilt, buy low, mass produce, mega-market, and the world, people, society, and communities be damned, for the pursuit of near-term shareholder value--have changed not a whit for the better part of a century.
Britain, when you can do stuff that's not the above--when you can shift past the brain-dead economics of the industrial age--then let's talk about exporting your way out of recession. Until then--want fries with that Ponziconomy?