Rebuild the local economy: prioritise labour-intensive sectors, difficult to automate, impossible to relocate abroad

Colin Hines, co-founder of LWM and convenor of the UK Green New Deal Group, comments on the Guardian’s recent editorial on productivity and robots which ‘repeated the cliché that automation does cost jobs, but more are created’.

He says that the problem with this is that the new jobs are frequently in different places from where they are lost and require very different skills, hence exacerbating the problems for the “left behind”.

Also unmentioned was that just as automation is starting to really bite, the world faces a strong possibility of another serious credit-induced economic downturn, from China to the UK and a perfect storm of domestic unemployment soaring and export markets falling, as happened after the 2008 economic slump.

The answer to these problems has to be a shift of emphasis to rebuilding the local economy by prioritising labour-intensive sectors that are difficult to automate and impossible to relocate abroad.

Two sectors are key:

  • face-to-face caring from medicine, education and elderly care
  • carbon-reducing national infrastructural renewal.

This should range from making the UK’s 30m buildings energy efficient, constructing new low-carbon dwellings and rebuilding local public transport links.

Funding could come from fairer taxes, local authority bonds in which all could invest, green ISAs and a massive new green infrastructure QE programme.

This approach should become central to all political parties, set out in their next election manifestos because “jobs in absolutely every constituency” is the crucial vote-winning mantra.

 

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General Electric says: “We will localise”

maersk contianer (2)

Last year came three reports on the downturn in global trade:

  • From the container industry: Søren Skou, chief executive of the Maersk Line, which carries goods and products between Asia, Europe, the US, Africa and Latin America and is now described as the only profitable freight line.
  • In a report from the Centre for Economic Policy Research: theslowdown in world trade has been much worse than previously reported, with global trade volumes plateauing over the past 18 months amid a rise in protectionism.

A higher proportion of the value of final goods is being added domestically

  • The World Bank: There is some evidence to suggest that part of the explanation may lie in shifts in the structure of value chains, in particular between China and the United States, with a higher proportion of the value of final goods being added domestically—that is, with less border crossing for intermediate goods. In addition, the post-crisis composition of demand has shifted from capital equipment to less import-intensive spending, such as consumption and government services.

china trade graphic

As politicians such as US Republican presidential candidate Donald Trump rail against “globalism” and promise to erect new barriers to commerce, policymakers and economists have also grown increasingly concerned about a slowdown in global trade growth. And according to the latest report by Global Trade Alert, which monitors protectionism around the world, that growth has disappeared altogether with the volume of goods traded around the world stagnant since January 2015.

Economists remain divided on the causes of the slowdown, some seeing long-term trends, including the shortening of global supply chains and the increasing role of digital trade. 

As the West Midlands Producers site notes, the reshoring trend, successes and possible pinch points, has been systematically explored and publicised by Aston Business School’s Professor David Bailey since 2013.

G20: mixed messages 

In their closing communique the G20 ministers last weekend reiterated a post-crisis pledge to avoid any move to protectionism, but ‘discriminatory measures’ such as local content rules and subsidies for local industry introduced by governments was up 50% in 2015 compared with the year before, according to the Global Trade Alert’s database – and G20 countries accounted for 81% of those measures.

The FT sees evidence that such measures are already having an impact on business decisions. In a speech in May at New York University, Jeff Immelt of General Electric said that faced with rising barriers to trade, a decision has been made to shift to a strategy of “localisation” rather than globalisation.

“In the face of a protectionist global environment, companies must navigate the world on their own,” said Mr Immelt. “This requires dramatic transformation. Going forward: We will localise.” 

 

 

 

Would you sign this Charter if the NFU and government rethink their GMO and food export drives?

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nfu charter

The National Farmers Union is urging the public to sign its charter and help to turn around a decline in self-sufficiency from 1991, when the country produced 75% of its own food, to the current production of 62%.

nfu charter2

It states that today, August 14, is the day British food supplies would run out if everything produced in a year was stored and eaten from January.

Producing as much of our food as we can is socially, economically and environmentally advantageous, but it will require middlemen to give food producers a transparently fair deal.

Two reservations:

The move to produce more food should not be used as a lever to introduce GM crops, supported by the NFU and government as this technology cannot be contained and would ‘infect’ crops of the same family grown many miles away, removing choice from conventional and organic farmers.

National and European governments should support the policy of greater self-sufficiency instead of prioritising food exports – see the 2012 delegation to China, headed by DEFRA minister Owen Paterson and Dacian Ciolos, the EU Commissioner travelling to China in July hoping to boost the global trade in food.

 

To sign the charter go to http://www.nfuonline.com/news/latest-news/nfu-campaign-calls-for-more-british-food/

 

 

 

City politics: unrest should be seen as a wake-up call

John Rossant is chairman of the New Cities Foundation and President of PublicisLive, which has been producing the World Economic Forum in Davos since 1995.

john rossantTwo days after the event, failing to mention the 4000 people gathered in London for the People’s Assembly, John Rossant points to a ‘common thread’ running through the Arab uprisings and Occupy Wall Street, the street battles that have convulsed Istanbul, Ankara and Stockholm this summer, and the current unrest that is coursing through São Paulo and Rio de Janeiro.

Rossant believes that: “This unrest should be seen as a wake-up call to all of us: politics in this, the first truly urban century, will largely take place in cities and will largely be about them.”

He focusses on the speed of urbanisation

“More than half of the Chinese population is now urban – from barely 20% one generation ago – and scores of millions more Chinese are expected to move into cities over the next decade. India is urbanising at a similarly breathless pace. Istanbul, a city of 1m souls in 1950, today is home to 13.5m people. Perhaps more surprisingly, Latin America is now the world’s most urban region.”

And the glaring disparities in income and opportunity

“Meanwhile, the triumph (sic) of market economics around the world has created impressive wealth and brand-new middle classes in China, India, Brazil and elsewhere. But it has also brought vast disparities in income and opportunity. Skyscrapers for the super-rich loom less than two miles from Cairo’s Tahrir Square. And just two miles in the other direction are slums without running water or other basic services. It is a similar picture in São Paulo or Rio, where teeming favelas abut gated communities. In New York City, inequality has never been so glaring as today. One stop on the subway can sweep you from one neighbourhood to another where median incomes are three times higher.”

He sees other reasons for the ‘drama playing out in global cities’: “Urban citizens want to be listened to, want their city to work better, and want dignity.”

After brief reflections on Istanbul, Cairo and New York, he turns to activism in São Paulo, initially sparked by a 20% rise in bus ticket prices, and points out the “increased sense by some that the city, Latin America’s largest business hub, is becoming a citadel for the global elite as Brazil prepares to host the World Cup in 2014 and the Olympic Games in 2016 . . . their protest is not vandalism but anxiety and anger that the wealth they can see is still light years out of their reach”.

His conclusion: “This is the most important issue of this century and we should be prepared for vast new urban upheavals. In China, I believe, it is only a question of time before the weight and demands of the new city population will transform the political life of the People’s Republic. Today’s urban spring is only the beginning”.

 

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