Stephen King: We must embrace change if we want to keep being successful

One secret of economic success is the ability to adjust to changing circumstances
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The Independent Online

As we're approaching the end of the year and heading into January, I thought I'd take a leaf out of the book of two-faced Janus, the Roman God of doors, gates, beginnings and endings from whom the first month of the year gets its name. Of course, Janus wasn't two-faced in the dishonest sense but, rather, he supposedly had powers to look both forwards and backwards.

Traditionally, we tend to take the turn of the year as an opportunity to review what's happened over the past 12 months and to preview what lies ahead. I want to take a slightly different approach. I'm still happy to look both backwards and forwards but, thanks to my eldest daughter, Helena, I want to adopt a slightly longer time frame.

This year, one of Helena's presents was a book called The Top 10 of Everything 2007, compiled by Russell Ash. If you need to discover the world's longest waterfalls, the world's worst air disasters or the Top 10 George Clooney films (by revenue, not by critical acclaim), you should turn to Mr Ash's book. Flicking through the pages, I came across a section called "Workers of the World". This contained a couple of useful tables detailing the Top 10 occupations in the UK today and 100 years ago.

Mr Ash is a bit of a naughty man because neither of these tables is sourced. He reckons there are around 4 million people working in "real estate renting and business activities", which he thinks is the biggest single category of employment. I take this to include all manner of financial services (otherwise there would be rather too many estate agents milling around). According to the Office for National Statistics, however, there are well over 6 million people working within this category using the so-called Standard Industrial Classification. The ONS also reckons there are 7 million people working in distribution, hotels and restaurants and a further 8 million people working in education, health and public administration. According to the ONS, manufacturing (which comes second in Mr Ash's list) accounts for 3.3 million workers.

Still, perhaps I'm being overly picky. Mr Ash looks to be grouping occupations together in a different way from the methodology employed by the ONS (and his numbers seem to exclude the self-employed whereas those from the ONS include them). Nevertheless, whatever the data source, things today appear to be very different from the pattern of work 100 years ago.

Back then, the most common occupation, accounting for 2.3 million people or more than 10 per cent of the workforce at the time, was "farmers and gardeners", which presumably includes the whole gamut of agricultural workers from dairy farmers to hop pickers. In second place, accounting for 2.2 million jobs, was domestic service: butlers, cooks, maids, doormen, cleaners, and so on. In third place came transport in all its many forms: lots of jobs on the railways, roads and, in those days, canals. Financial workers didn't feature anywhere in the top 10, nor did medical workers (other than the doctors who were lumped together with teachers, lawyers and clergymen as members of the "professions").

Whatever my reservations about his data sources, it strikes me that there's something rather enlightening about Mr Ash's Top 10 lists of occupations. We sometimes forget the degree to which an economy is evolving. We regard the current position as somehow fixed for all time and worry about threats to that assumption. We're concerned about competition from abroad. We're worried about our possible obsolescence in the light of new technologies. We seek to protect our interests because we fear the winds of change. Our identities are partly determined by our occupations and we take pride in doing our jobs well.

Imagine, though, that we'd successfully defended our chosen occupations 100 years ago. Many of us would, using this approach, still find ourselves in domestic servitude or gathering the harvest. There's nothing necessarily wrong with either of these occupations but we shouldn't forget that pro-gress brings not just risks but also tremendous opportunities. The hop picker of 100 years ago might now be a scientist, an architect or a hedge fund manager (I leave it to the reader to decide which of these occupations is the most useful).

As we head into 2007, we're going through one of those periods of profound economic change in the global economy. Just as the railways, ships and eventually aeroplanes transformed the industrialised world in the second half of the 19th century and the first half of the 20th century, so information technology and global political re-arrangements are transforming our lives now. Not surprisingly, we sometimes feel vulnerable. Our perceptions of vulnerability, though, are not reasons, in themselves, to prevent change from happening.

Most of us need to work. Perhaps, though, we shouldn't assume we can have a job for life, or indeed a vocation for life. Things change beyond our control. Technologies evolve in ways that make some jobs redundant (demand for canal workers is lower now than it once was). Competition comes from unexpected sources (few thought a few years ago that the Chinese or Indians would be playing a major part in the global labour market).

One of the secrets of long run economic success is the ability to adjust in the light of changing circumstances. The UK has thrived over the past 100 years on precisely this basis. At the beginning of the 21st century, GDP per capita is more than four times bigger than it was in 1900.

Technology has played a huge role in this improvement in our living standards. But we've also embraced change. The partly skilled and unskilled made up around 50 per cent of the British workforce in 1900. They now account for less than 30 per cent of the workforce: still too high, but a step in the right direction. Over the years, we've benefited from more education, higher productivity and our willingness to adjust to altered circumstances. Sometimes this adjustment is painful and sometimes we are too cavalier about those who are left behind. But change seems infinitely better than stagnation.

As we enter 2007, the danger is that too many of us resist change. The resistance "list" gets longer and longer. The collapse of the Doha trade round, the opposition to Bulgarian and Romanian immigration, the increased strain between Europe and Russia over energy and America's fears of China as an emerging economic superpower are signs that we are heading towards a more protectionist, more self-centred, less trusting approach to economic policy. We've been here before, of course. On most of those occasions, it proved to be an approach that led to unintended failure, whether it was the economic collapse of the 1930s, the inflationary excesses of the 1970s or, indeed, two world wars.

I wouldn't want to suggest that we should take "out with the old, in with the new" as a strict rule for our economic progress, but I'd certainly recommend that, for our mutual benefit, we embrace the new. With that thought, I'm going to return to Helena's book. Now, where was I... ah, yes, the Top 10 least intelligent dog breeds...

Stephen King is managing director of economics at HSBC

stephen.king@hsbcib.com

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