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A good introduction to the topic...
on 7 September 2014
'Made in Britain' is an entertaining and enlightening myth-busting analysis of the British economy, an ideal starting point for the non-specialist or enquiringly student , with its focus more or less exclusively on private sector activity. Evan Davis writes with a flowing, good humoured light touch. His central theme is that yes Britain is very much open for business. However, it has suffered and continues to suffer from being rather too dependent on the service sector, consumption rather than investment growth (hence the significant o- going balance of payments problem) and issues relating to regional imbalances, particularly concerning skills mismatches and labour immobility.
One of the most encouraging aspects of this book is the discussion around the general productivity, creatively and global reach of many British firms. Car building, tourism, brand creation, finance and top level engineering innovation are all sectors in which the UK excels. As a nation we are also a major destination for foreign Direct Investment, which not only creates jobs but leads to increased exports, expertise and the development of local suppler bases.
The problem is of course is that there are not enough success stories, nor are they spread widely enough for the benefits of growth to filter through to a significant proportion of the UK's population. Even so Davis is charmingly up-beat. Suggesting that the global as well as the national economy is in constant flux. Yesterday we made ships, today we make cars and sell financial services, tomorrow who knows? The point is to be competitive, enterprising and more inclined to save rather than consume.
For the budding economists, Mr Davis gives a number worthwhile insights that really aid understanding of the mechanisms behind trends in world trade and economic growth, better still he always illustrates his points with amusing or striking examples to sustain interest.
His first point is that trade is good. The theory of Comparative Advantage is the key point, here. Trade lead leads to competition and innovation, meaning that specialisation is a natural consequence. Specialisation means that some industrial sectors die away, others blossom. Second that trade leads to growth and economic growth leads to more trade. However, it doesn't matter whether a particular company is British 'owned' ( Public Ltd companies are owned by shareholders who could be based anywhere!),what matters is that company is producing goods or services in the UK creating jobs and incomes for UK citizens by selling to foreign markets or by reducing the inclination of UK citizens to buy imported goods.
A highly recommendable book, especially for the novice. I would have liked something on the role of government. If enterprise is so good, what should government do? Lower taxes?, cut government spending right back?, reduce regulation? In similar vein, it would have been interesting to learn Mr D's views on the EU and the Euro as either enablers or possibly more like, 'disablers' of growth ,enterprise and trade. These omissions aside, go buy- learn and be entertained!