Britain 'should model itself on California'

Tony Blair should model the British economy not on that of Germany, Japan or one of the Asian tigers but on California, the US state that swept Ronald Reagan to power, according to a study published today by left-of-centre think-tank Demos, writes Michael Harrison.

The study by journalist Charles Leadbeater argues that traditional economic role models advocated by stakeholder economists such as Will Hutton and John Kay are outdated or inappropriate for Britain.

A far better role model, he says, is the West Coast of America, which has become one of the most dynamic economies in the world on the back of knowledge-based and high-technology industries. With a GDP of about $800bn and a workforce of 14 million, California is not dissimilar in size and structure to the UK.

Although it has high levels of unemployment, inequality and crime, it has restructured away from industries such as defence and aerospace and into computer services, multi-media, design and biotechnology.

'Britain: The California of Europe', Demos, pounds 2.95