Britain’s economy is suffering from an ‘intangible curse’, with its focus on intangible assets such as software, brands, and design leading to a lack of investment in tangible assets like machinery and buildings. This shift towards intangibles has increased inequality, as they are more concentrated in London and the South East. Intangible assets also tend to be less evenly distributed among employees, contributing to wage stagnation.
Furthermore, the UK’s strength in areas such as finance, advertising, and law has led to an over-concentration in these sectors, reducing diversity and resilience. The dominance of these sectors has also led to the neglect of other areas such as manufacturing, with the UK’s manufacturing sector now smaller than that of Belgium.
On the other hand, the UK’s emphasis on intangibles has led to strengths in creativity and innovation. Yet, the benefits of this are often reaped by foreign firms, with the UK’s weak domestic industrial base unable to capitalise on these innovations. In conclusion, a rebalancing of the UK’s economy is necessary, with a focus on diversification and investment in tangible assets to ensure long-term growth and resilience.
Go to source article: https://www.geoffmulgan.com/post/the-curse-of-the-intangibles-a-short-analysis-of-what-might-be-going-wrong-in-britain?fbclid=IwAR1HF7Ttj6e15DQStOtSaBcYQUAYkTsRV-r1cdne5hV_p0xhXICcRHKu08A