My piece last week about the growth of the design and creativity industries in East Asian countries got one or two of you going. Bob Dobson, in particular, responded at length with some rather interesting observations on this topic, which I am pleased to reproduce here:
For some years the West has talked of a 'post industrial' economy where we hang on to the high-value work and job out the mucky stuff overseas. It has always seemed inevitable to me that the new manufacturing economies would go down this route too, because they want the high value attractive white collar jobs as much as we do. In fact they will get there much faster than we did, because we have laid out a route map to be followed.
I cannot remember the accurate figures, but China is producing ten or 100 times more engineering graduates than America, and 50 or 500 times more than Europe. Similarly, the ‘new’ Europe's output of technology graduates is enormous; India is already a ‘powerhouse’; South Korea kick-started the growth that eventually turned it into an international force with the 1988 Olympic Games* - and so on.
And, of course, Japan followed this route from 1946 to about 1990. The American occupiers set out to break the old power structures and create a modern country with a new manufacturing base (the theory being that manufacturing leads to exports, which makes it harder to invade countries that are customers and/or suppliers).
In the 1960s 'made in Japan' was a euphemism for poor quality goods, but from about 1970, Japanese cars were being exported and redefining manufacturing and quality perceptions. By 1980, 'made in Japan' came to mean good quality. The big recession in Japan of the early 1990s probably marked its transition to ‘post industrial’; manufacturing was sent overseas, more reliance was placed on other sectors and the financial sector grew.
Europe was the original manufacturing centre for the world, starting with the Industrial Revolution and going through Victorian production. There is a case to be made that America followed Europe; its initial drive being to reap wealth from natural resources, then occupy the landmass and establish an agricultural economy to feed the growing population. Manufacturing on a large scale will not have been viable before 1850 at the earliest, with the big push being as late as 1920 and mass immigration.
Thus we see that all industrial economies eventually become 'post industrial'. There is an advantage in doing it quicker, as seems to happen with each iteration: you have more of a manufacturing base remaining.
Education may be the key driver. Governments want to educate their populations so that they can perform higher value work and grow the economy. The other side of this coin is that educated people do not want to do low-pay, low-skill work. So you end up with an inevitable shift to post industrial. Significantly, western politicians have an effective working life at the top of say ten years, so their time horizons are far lower than what might be considered the optimum for intergenerational economic stability.
This cycle requires that there are emerging economies willing to take on low skilled work, to industrialise as others move into their post-industrial era. Ultimately the human population is a finite resource, so this cycle will not go on forever.
And the other question is: what is a ‘post-post-industrial’ economy like?
*PS: is hosting the Olympic Games good for business? Japan did it in 1964, emerging on the international stage. Germany hosted them in 1972, plus the 1974 World Cup, aiding its move from post-war recovery to manufacturing giant. Mexico did '68 and '70 and became a regional power. Australia has seen its tourism and creative industries grow since 2000, and there was similar success for Barcelona. Meanwhile, Los Angeles revived a dead part of town and China clearly saw the Olympics as a long-term investment in international relations. Perhaps the exception to this is Moscow, which had the Games in 1980 and the Soviet Union collapsed about ten years later.
Now London has them coming. We seem to be on track with the build up - but have to consider the weak economy and our construction industry's reputation for late completion. And the UK team’s performance was so good last time, can we match that again?
Let’s hope so! My thanks to Bob for taking the time and trouble to put this article together.
Les Hunt
Editor