Some weeks ago at the CBI annual conference, three Party Leaders and the Chairman of BT lined up and spoke about the dire consequences of the UK outside the EU.
As one of Britain’s 4.8million business owners, and a university lecturer to dozens of international students, I couldn’t disagree with their analysis more. Here why:
1) Emerging Markets (undeveloped low-to-medium economies) will generate more than 60 percent of global economic growth in the next five years, according to the Economist Intelligence Unit (EIU)
2) Investment bank, Goldman Sachs, projects that the Chinese economy will overtake that of the USA in size by 2027 at market exchange rates. The EIU estimate this power transfer sooner: 2025.
3) The EIU predict that each economy of China, India, Russia, and Brazil, will become larger than those of France and the UK, by 2020. Likewise, India’s economy will be larger than Germany’s, and Russia and Brazil will surpass Germany soon after.
4) According to leading global management consultancy McKinsey (who have, for many years, held ex-Foreign Secretary William Hague, as a retained consultant), cities’ Gross Domestic Product (GDP) will increase by $30 trillion during 2010-2015, due to urbanisation in emerging markets. 47 percent of this economic growth will occur in “440 emerging markets centres” reports the Economist (Manktelow et al, 2014).
5) China presently has 150 cities with at least one million residents; this is expected to rise to between 220 and 400 by 2020. Investment Bank Credit Suisse, project that by 2037, emerging market cities will account for half the world’s population
6) Emerging markets megalopolises, such as Mumbai and Singapore, are expected to experience economic growth at an annual average of 6.3 percent, during 2010-16. Even more interestingly for UK firms, so-called second tier cities in emerging markets, will grow annually at more than 9 percent.
7) Of any credible Emerging Market index, whether reported by Forbes, Bloomberg, Morgan Stanley, or elsewhere, only two EU states (Poland and the Czech Republic) are regularly considered to be ranked within the world’s twenty most promising markets. (These are at the lower end.)
8) According to analysts at McKinsey, the ascent of cities in Emerging Markets will create 1 billion new consumers by 2025, “giving a total of nearly two billion consumers located there”.
9) The EIU write: “it is perfectly possible that over the next few years some 70 percent of the world’s economic growth will come from Emerging Markets”
10) Academics (Gupta & Dingham) at the world-renowned University of Maryland Business School conclude: “If we look at the next ten years, the rise of emerging economies will cause a bigger structural change in the world economy than any decade in the last 200 years”
11) Expansion of so-called ‘middle classes’, will mean that consumption in emerging markets will rise from $12 trillion in 2010 to $30 trillion in 2025. McKinsey, again, describe this trading period as “the biggest growth opportunity in the history of capitalism”
12) As yet, no study exists (I repeat, not one), whether in Government, Parliament, Brussels, Academia, or from the UK business community, that shows specific, relevant or actionable information, to show, in any manner, that the UK business market, or taxpaying citizens, draw any benefit whatsoever from membership of the European Union.
On the above point, I would very much welcome readers’ to spend the hours and days that I and another researcher has, writing to organisations for clarification around ancient and irrelevant data, and also googling publicly available information. If you find anything relevant please don’t hesitate to let me know …
Now, I have huge respect for business leaders at the CBI – as opposed to the present triumvirate of college politics boys (Messrs, Clegg, Cameron and Miliband, who have never run a business) who pitch up to lecture entrepreneurs and then scare the hell out of them.
And, because of an innate compassion for alternative perspectives, and a love of democracy (no matter how inconvenient), I do firmly welcome the regular interventions of BT and Nissan’s leaders into debate about the health of Britain’s EU membership.
But, as my grandmother once said to me, when I was caught stealing a second chocolate Wagon Wheel, “come on, don’t kid a kidder”.
So, come on, let’s stick to the facts.
In 2009, BT was forced (in the words of its Chief Executive’s words in a BBC interview) to “reduce costs”. The Beeb then reported online that BT was to shed around 15,000 jobs, “mostly in the UK”.
And according to BT’s own Global Services website: “80 percent of BT’s largest customers by company turnover are expanding in Asia”. Moreover, tens of thousands of employees work for BT and their dynamic range of subsidiaries in India.
So, if it’s all right for BT to expand and flourish into the world’s emerging markets, why should the 4.8 million smaller firms, who can only dream of their revenues and access to government, be held back, in an EU-contrived straightjacket?
After all, it is UK businesses based here in their entirety, who don’t have international subsidiaries and divisions, who are mainly footing a gargantuan bill for the privilege of remaining in a market that is viewed by most FTSE ‘C-Suiters’ as a financial cemetery somewhere to the west of Asia and east of America.
As a business owner, I can’t quite understand why any UK company, with serious international trading ambitions in 2014, would, in any way, shape or form, endorse the EU.
Across almost all economic data and reviews by respected business analysts, when one boils down the polite language to understandable English, the Eurozone’s future offers nothing but stagnation, layers of new transaction taxes and invasive regulation, bail outs, and commensurate social disorder. That is, unless your ‘enterprise’ qualifies for a Grant or Subsidy.
Surely, if we really wanted to, we could create more jobs in UK HMG by doling out business grants from London or from the regional UK Trade and Investment or BIS hubs. But if we did that, then it does sort of go against the grain of what a business should be about, doesn’t it?
For a global trading nation, and a country with international sailing within our DNA, regrettably we have spectacularly missed the boat by actively seizing opportunities offered by this new world order of emerging markets.
There is no other reason for this, other than, for far too long, our government ministers, and too many so-called leading industrialists (as distinct to entrepreneurs), have been obsessed with propping up the EU and praying to the God of Mammon that their post-war, baby-boomer, Euro-loving, Woodstock-cuddling, candle-swaying, philosophical claptrap was right.
It wasn’t. It isn’t.
Withdrawing from the political bloc of the European Union, will not see Mercedes Benz garages close. Nor will it see Caffe Nero’s pull down the shutters. It might actually save hundreds of thousands of jobs, here and soon.
Because our business regulatory and taxation structures, and our supply chains, can potentially become more streamlined, flexible, adaptive and resilient.
For starters, we won’t have the risk of more EU bailouts hanging over our future balance sheets.
As US President Reagan once chided the Soviet Socialist leader from Berlin’s split streets: “Mr Gorbachev, tear down this wall.” Within four years Gorbachev had done and, since, has worked tirelessly to make the rather obvious link that gross, forced, centralisation equals gross, unforced, unproductivity.
I urge the CBI and their leading companies, to accept that British business needs to prepare for the same type of barriers to be removed.
The UK’s withdrawal from the hideous, unaccountable empire of Red Tape, is essential to future prosperity – not a threat to it.
Government and Industry leaders should knock down the regulatory wall of Brussels and run in tandem to the future centres of prosperity; including Hong Kong, Shanghai, Sao Paulo, Rio de Janeiro, Mumbai, Abu Dhabi, Qatar, and … yes … Moscow in little old Russia; Europe’s largest automotive market, closed by counter-productive and illogical EU sanctions.
If we want any hope, that we can pay down our £1.4 trillion of National Government debt, or that our kids and grandkids will find a decent paying job, then we have no choice.
I mention BT and Nissan; both are fantastic brand achievements with terrific leadership in many quarters.
But Britain and Japan also have something else in common. Both countries people have developed some of the world’s most resilient private enterprises. Some Japanese companies are almost one thousand years old.
Both countries inspired and supported the world’s most successful free enterprises, hundreds of years before the European Union began.
Moreover, both countries will continue to do so hundreds of years after Britain withdraws from the European Union, or the Red Tape empire, with Belgium at its heart, collapses in rioting and debt.
Both Japanese and British companies have survived and even prospered after bouts of terrible warfare, terrorism, disease, and natural disasters; most recently the tragedy of the Tsunami and radioactive leak at Fukushima in 2011.
Decent corporate leadership embraces opportunity and prepares to adapt for inevitable change. For the 4.8 million UK businesses, the trading environment has been turned on its head by digital media and the rise of Emerging Markets.
My message therefore, to just a couple of leading lights at the CBI is, that smaller companies and entrepreneurs like us, need business mentors like you, to lead the way out of this regional EU quagmire. Lead us to the global horizons, that you yourselves are familiar with, where the fields have far more fruit to pick, and the bureaucrats seem to take far, far less from your basket.
Richard Bingley is a senior lecturer and entrepreneur in the UK: @bingleyr
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