The Search for Growth
If he's like the rest of us, George Osborne is probably thinking about Japan today. But he's also supposed to be thinking about growth. Having spent his first months deciding how to shrink the deficit, the focus of next week's Budget, we're told, will be how to expand the economy.
He's not the only one. It feels like every day I get another invitation to a "high level seminar" or conference on the subject of growth. But where, exactly, does economic growth actually come from? And what, if anything, can governments do to help?
Those are the questions I've tried to answer in a two part series called "The Search for Growth", the first of which will be broadcast on Radio 4 today.
When it comes to growth, politicians have no trouble describing the goal - George Osborne and Business Secretary Vince Cable will each be once again describing their vision of a "new economic model for the UK" in the next few days.
The problem is, we're not starting from a blank sheet. Britain's been in the economic growth business for a long time - you could say we started it, with the industrial revolution from the end of the 18th Century. That is where modern growth, in terms of a fairly continual rate of growth in income per head, really began. Growth before that time had only been "extensive" growth, where growth comes solely through a rising population, and living standards remain broadly the same.
More than 200 years of intensive growth - growth in income per head - has made us one of the richest countries in the world (a fact it's sometimes easy to forget, amidst the gloom). But it's also given us bad habits, and now we have a financial crisis to shake off, and the tightest squeeze in government spending in at least a generation. Understandably, people worry that we will never get back to the growth path we were on.
One thing is clear. When it comes to growth, even small differences can make a big difference to our living standards over time. In the past 40 years our economy has grown by about 2.25% a year, on average. At that rate, living standards double every 30 years. If we grow by 1.25% year instead, it will take 60 years.
Is that what we can now expect? It is one possible path for the UK. But after making these programmes I don't think it's the only one. Around the country, you can find plenty of vibrant businesses, even in supposedly "dying" sectors like shipbuilding, and even in "deeply challenged" regions like the North East.
These firms are creating growth and jobs the same way that growth has always been created - through innovation. Making better stuff, and using fewer resources to do it.
It's true of "high-tech" companies like the British software company, Autonomy, and the high-end fashion label, Burberry, both of whom feature in the programme. But we also spoke to Bury Black Pudding, in an industrial estate in Greater Manchester. It doesn't have a big office in Silicon Valley, or a prime slot in London Fashion Week, but it's doing very nicely indeed.
Growth is happening. In many ways, it would take a very determined government to stop it entirely (though plenty of governments in the past have done their best). But even the success stories also help show why other parts of the economy are not taking part.
Alnmaritec, the boat company that I visited yesterday in Blyth, on the Northumbrian coast, has hired more than 100 people in the past year, most of them former steelworkers and shipbuilders. The company has gone from building £250,000 steel boats to £2m ones in just 3-4 years, and has vessels in its yard destined for China, Angola, and Australia. But it can't get so much as an overdraft from its bank, and it is recruiting naval architects from the rest of the EU because it can't find enough of them here in Britain.
As ever, the Search for Growth is a glass half full, glass half empty kind of story. But there's some pretty interesting stuff in the glass.