Margareta Pagano: Dyson and Portas are not the answer to our problems
Famous talking heads can't fix the economy, we need serious policies
Sunday 21 August 2011
Shortly after last year's election, the German ambassador to London hosted a discussion between the former head of the CBI, Richard Lambert, and the TUC boss, Brendan Barber, on how the new coalition government should kick-start the UK economy.
One of the more pertinent observations, which impressed most of us in the audience that night, came from a German industrialist – a director at one of the world's most successful car companies – who asked the two bosses if they didn't think the UK had a serious problem if, whenever there is any debate about the future of British manufacturing, the only name that ever crops up is Sir James Dyson, the inventor of the pricey vacuum cleaners that bear his name?
The industrialist didn't raise the question to knock – or mock – Dyson, but rather to point to the shallowness of British attitudes towards engineering and manufacturing. He's spot on: how sad that the only person anyone here can name as an engineer of note – and who got a knighthood – is the inventor of a simple "root cyclone" engine.
The German's analysis came to mind last week as Dyson, after announcing knock-out profits of £206m, popped up to moan about the lack of engineers in the UK. His comments seemed self-serving; particularly as he's moved his manufacturing plant to Malaysia and just as the UK and the rest of the world appear to be careering towards a double-dip recession and secondary banking crisis. Yet Dyson is the man entrusted by the Conservatives to come up with ideas to improve the nation's manufacturing, which he did in a report published last year as Ingenious Britain.
It goes without saying that we need more engineers – scientists and mathematicians, too – but such a shift in culture requires joined-up thinking. Sadly, there were few original thoughts in Dyson's report.
Another example of such gimmickry is the absurd appointment of Mary Portas to turn around the fortunes of the high street. Looking at the pages of publicity in the papers last week for her new shop, it's hard to know how Portas has time for her report, which is due to be included in the Chancellor's autumn growth plan. If the Government thinks the public buys into these talking heads as replacements for serious policy initiatives, it is mistaken.
It's also time for George Osborne to stop posturing. His "I was right" remark, made so childishly following the latest flare-up of the eurozone debt crisis, was inappropriate. While he may be right in some respects, he was wrong to say so – our trading base is entwined with Europe.
There's no shame in Osborne announcing that Plan A needs stars as well as stripes. Over the past few months the landscape has changed, so policy must adapt. We've had a nuclear disaster in Japan, soaring commodity prices, seismic political unrest in the Middle East, a downturn in the US and a sovereign debt crisis in the eurozone, which is turning into a solvency crisis for Europe's biggest banks. In the UK, we have rising inflation, the biggest squeeze on real incomes for decades, a slowdown in manufacturing, the sharpest falls in share prices to levels not seen since Labour's first year of office, another rise in unemployment with one in five of all 16 to 24-year-olds out of work, poor retail sales, and riots. For once, consumers have listened to the doomsayers and are quite rightly cutting back.
If this isn't the time for Osborne to reflect on a U-turn, then one can only assume his pride is greater than his desire to promote growth and the country's well-being. There are already mutterings of rebellion on the front and back-benches – behind the scenes Tories such as Philip Hammond and David Davis are said to be pushing for VAT and other tax cuts. Reducing the deficit is still the right priority, but the risks of over-tightening monetary policy are too great. Osborne needs grown-up measures to kick-start the economy if we are to avoid a second recession and they don't have to cost much.
He should start by calling in Lord Harris of Peckham, the Carpetright tycoon who came up with the brilliant idea after the riots that companies like his should give jobs to unemployed youngsters and get the benefits the Government would have paid to them. Harris says he would employ 400 overnight and reckons most companies would follow. Now that's what you might call action.
Is the US tech patent war going to blow up into another sub-prime fiasco?
Google's decision to pay $12bn for Motorola looks little short of bonkers. The online giant has admitted that the real driver to the deal is getting access to Motorola's technology war chest which has about 24,500 patents under lock and key. That's about $350,000 for each of Motorola's patents – technology which Google didn't invent and which it is unlikely ever to use, as the main reason for buying is to stop rivals like Apple from snapping them up.
This patent war is getting so ridiculous that some analysts reckon it's turning into a sub-prime-type crisis, with patents being traded like mortgages. Apple, Research in Motion, maker of the BlackBerry, and Microsoft have already paid a total of $4.5bn for the Nortel Networks patents.
Another battle is brewing at Kodak which is considering selling its 1,100 patents covering capturing, storing, organising and sharing digital images. One of these patents covers image previewing technology which Kodak says is being infringed by Apple and RIM. If Kodak goes ahead, expect an expensive and vicious fight as Apple is determined to win.
Quite apart from anything else, this obsession with patents is destroying businesses rather than protecting them and the ability of top scientists and engineers to develop new technologies. Patents filed in the US with the Patent and Trademark Office have nearly doubled to 509,000 last year. The jump is not because Americans are more inventive but because lawyers are getting greedier. It's they who are pushing companies to lodge anything they can lay their hands.
Then those same lawyers – the patent trolls as they are known – persuade all the big firms to sue. As I said, bonkers. So what's to be done? Anthony Rushton, co-founder of Telemetry, one of the UK's leading online video technology specialists, suggests all patents should be given up to a year to prove they are commercial. After that, the patent should be allowed to expire: quite simple really.
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