Bill Emmott: Economy drive

The ever-expanding growth of The Economist is one of the biggest media success stories ever. Raymond Snoddy talks to its editor about the magazine's past, present and future
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Bill Emmott is not the sort of editor that gets invited to Chequers. Alastair Campbell would scarcely know his telephone number and certainly wouldn't have the slightest interest in trying to bully him into submission. The White House would be equally indifferent, and outside his own household Emmott would really qualify as a household name only among the ranks of international think-tanks and in the elevated circles where liberal, free-market economists gather.

"We have never been part of the establishment - a slight outsider even though we are read by business people and people in government," concedes Emmott, who has been editor of The Economist since 1993.

"If you like, we are not attached to anyone. It describes our independence but also helps to preserve it," says the surprisingly genial Emmott, sitting in his corner office on the 13th floor of The Economist's headquarters in St James.

Emmott's references to "business people" and "people in government" among his readership are decidedly understated. "The magazine I spend most of my days reading is The Economist" reads a testimonial from Bill Gates, chairman of Microsoft. The Chancellor of the Exchequer, Gordon Brown, describes it as "compelling reading", although The Economist is unsure about Brown, fearing too great an appetite for high taxation.

Not that The Economist is merely the preserve of a small but powerful elite. Figures released by the Audit Bureau of Circulations last month showed that Emmott had achieved the title's first seven-figure global sale in its 162-year history. To be exact: 1,009,759.

Emmott says that the breakthrough has been achieved in spite of his publication (which he and Economist staff somewhat bizarrely refer to as a newspaper rather than a magazine) having a title that causes many a casual reader to recoil.

"It's off-putting, that name," he says. "It's our greatest barrier because people think it's about economics. It's probably a bit academic. It's rather serious. But the name has always been our greatest asset because it's got resonance. It's got history and a kind of authority and prestige about it."

In the six months to September, the privately owned Economist group had a pre-tax profit of £11.5m on turnover of £94.2m, but profits are now likely to accelerate as the outlook for international advertising continues to improve.

Partly because of its stable ownership - 50 per cent is held by Pearson, owners of the Financial Times, with the rest owned by powerful City and industrial families such as the Rothschilds, Schroeders and the Cadburys - The Economist has been able to make long-term investments for the future, year after year.

As a result, every month or so now there are small positive milestones - quite apart from the big round one-million figure. The magazine has also just overtaken the newsstand sales of all three main US rivals - Forbes, Fortune and Business Week. The Economist now sells more than 500,000 copies in America.

How has a small British weekly with an off-putting name and a formidable intellectual reputation managed to carve out such a large international circulation and an expanding business? The answer is it has been a long, slow, gradual process.

"The cleverness of what (publisher David Hanger) and his colleagues on the commercial side have done is essentially to realise that if you grow by 7 per cent a year you double in 10 years. You don't have to grow by 15 or 20 per cent a year," says Emmott.

This "slow but steady" approach has seen the title building up its readership around the world.

Hanger, who joined The Economist in 1968 intending to stay a couple of years to have something to put on his CV and who retires this month, says: "The truth is what you have done is move your position in the various markets. You've made 110,000 more or less in Asia, 150,000 copies a week in the UK, 200,000-plus on the Continent and 500,000 in North America."

The publication also manages to sell single copies in Cuba, Guinea-Bissau and the Cook Islands and doubles that sale in Anguilla, Guadeloupe, Chad, Democratic Republic of Congo and Reunion.

According to Hanger, investment in resources has been crucial to the growth of the title. "While we are doing all this you can employ more journalists, better journalists," he says. "You can open up overseas offices for your journalists and we haven't cut back. Everybody else has cut back. You are constantly expanding and improving your offer to advertisers."

James Wilson created The Economist in 1843 to fight for one of the great causes of the day - free trade. His portrait hangs on the wall of the editor's office. But it is the past four editors that have really added to the title's pattern of growth, each of them making a quite specific contribution.

In the late 1960s and early 70s The Economist was a small British publication with a circulation of around 100,000 and little sign of growth. There was one staff journalist in Washington and later one in Tokyo. It was Sir Alastair Burnet who, as a young editor, introduced quirky, irreverent picture covers in place of dense words and made the magazine more fun and much more lively. Burnet later became a household name after moving first to the Daily Express and then to Independent Television News.

His successor at The Economist, Andrew Knight - who was to become chief executive of the Telegraph Group under Conrad Black - began the move into Europe and started to think about America. Rupert Pennant-Rea, who went to the Bank of England and is now a businessman, led the charge into the US. Emmott, who has no intention of going anywhere soon, and who was formerly a Japanese-based correspondent for The Economist, added an Asian dimension just as Asia was taking off as a story.

There has also been a succession of appropriately clever white-out-of-red advertisements from Abbott Mead Vickers that have ranged from "Not all mind-expanding substances are illegal" and "How to win at board games" to "The pregnant pause. Make sure you're not the father".

During Emmott's editorship he has tried to create a more global product and to build a readership from a common group of people in government, business, universities and think-tanks and who travel a lot and talk to each other.

In that respect it is like a parish magazine except that the parish is the world. The more people are buried in a plethora of instant information, the more he believes there is a need for a publication to sift out the important things from the abundance they have around them.

The international expansion and growing financial success of The Economist obviously have been greatly helped by large social and industrial trends - globalisation, the spread of the English language and a huge increase in travel. Yet no other British media business, with the possible exception of the Financial Times, has managed to pull off such a trick.

But what do you offer a readership which The Economist claims has a total annual worldwide personal income of £70bn and how do you keep a magazine edited in the heart of London truly global?

In addition to having 28 journalists in 21 overseas offices, Emmott and his other journalists - 70 in total - travel a lot and try to avoid being too greatly influenced by the local media.

The only daily newspapers The Economist editor reads, for example, are the FT and the International Herald Tribune and he doesn't read any of the British Sunday newspapers. He gives himself a day off.

While trying to avoid too much of a British influence, Emmott also has to steel himself against allowing The Economist to become too American, quite a challenge given that half the readers are there and the US generates vast quantities of news and information every day.

"You keep telling yourself you are not American," says Emmott, who was born in London, the son of a public sector accountant, and who studied politics, philosophy and economics at Oxford.

"You ask the question why would Americans want to buy The Economist, and the answer is that they want global affairs and they want us writing and bringing the world to them," he says.

Are 500,000 Americans really detailed readers of a quite challenging British publication called The Economist? Do some merely reside on the coffee tables of those who like to be seen as sophisticated?

"It's hard to square with the surveys we do and 500,000 is one hell of a lot of coffee tables," he says. "Our market research people claim increasing amounts of time reading the paper. Why should they lie even more than in the past?"

Emmott is reasonably well known in the US but there are two countries where The Economist editor is really high profile: Japan and Italy. On Japan he wrote a book, The Sun Also Sets, predicting, correctly, the waning of Japanese dominance.

"The Japanese couldn't work out whether I was on their side or against them," he says.

In Italy, Emmott is a controversial figure because The Economist essentially accused the Italian president Silvio Berlusconi of being a crook who had given bribes. As a result, two lawsuits are outstanding against The Economist in Italy, both of which are being vigorously defended.

The robust Italian coverage is a further indication that preconceptions about The Economist among non-readers are not always true.

Emmott, for example, has come out against the British monarchy on the grounds that at least you would be stuck with an incompetent elected or appointed head of state for only four or five years at a time.

He backed John Major in 1997 - "a mistake because he wasn't really credible" - but judged Tony Blair to be sufficiently centre-right to support last time.

Emmott has also put the weight of his publication behind gay marriage as an institution and called for the legalisation of narcotic drugs.

But he supported the invasion of Iraq on the grounds that it was too risky to wait and see whether or not Saddam Hussein really had weapons of mass destruction and that the status quo in Iraq was unsustainable.

The views and opinions of The Economist, Emmott believes, are connected by a consistent thread stretching back for more than 150 years.

"We are a very firmly liberal paper - free trade, no barriers but also individual liberty," says Emmott, who adds that he doesn't much like the idea of people being locked up without trial.

Earlier this month the cover featured a cage with a domestic roof on top and a surveillance camera attached to a lamp-post outside.

The headline read: "Taking Britain's Liberties." Inside the issue the editorial concluded: "Britons are lucky people and complacent ones. The liberties they take for granted have evolved over a thousand years or so. The idea that any one government should seriously undermine them seems implausible. It isn't."

The 48-year-old Emmott almost didn't make it on to The Economist staff after indifferent initial interviews. He heard nothing and was a year into a doctorate on the French Communist Party when The Economist got in touch again. Eventually he was offered the number two job in the Brussels office, before working in London and then volunteering for a vacancy in Japan.

In his spare time the ultimate global editor likes walking in the English countryside and playing cricket. As he prepares for a few more years as editor of The Economist is there any chance that Emmott will end the anonymity of the magazine's writers?

There is not. It's a tradition and now a point of difference but above all, he believes, it helps the magazine to retain a collective voice. "The identity of The Economist is a very strong thing and it benefits from co-operation between journalists. The articles are not written by a collective but there is a certain collective approach and methodology," insists Emmott, the advocate of individual liberty.

The Economist methodology includes analytical rigour and a way of writing a story that includes laying out the facts and then coming to a conclusion based on those facts.

Yet Emmott is not one of those who is quick to condemn publications that are less rigorous with their facts, and he has little truck with those who argue that British political institutions are somehow being undermined by arrogant, irresponsible journalists.

"I do share a concern about the reliability and standards of professionalism in the media. I think they are inadequate. The need for them to be high has increased because the readership is more educated and expectations have gone up," explains Emmott.

At the same time, the political importance of the media has increased because of the ability for an idea to swirl around the world in no time at all and consumer's ability to compare and contrast has also increased.

"That's the real change. Expectations have gone up and the media hasn't gone up with them," Emmott adds. As the next British general election comes into view, what will The Economist decide, with or without the help of Alastair Campbell? Emmott is not committing himself because the debate with his staff has not taken place yet, but some of the outlines of that debate are already apparent.

On the one hand The Economist is critical of the Tories for their failure to come up with a credible tax plan, for what it sees as their wrong-headed approach to university tuition fees, not to mention the credibility of Michael Howard as a potential Prime Minister. Balanced against that is the worrying issue of how far Labour would remain a centre-right party under Gordon Brown and illiberal polices on everything from law and order to immigration.

"I'll smile inscrutably," says Bill Emmott, the former Japanese correspondent of The Economist, using the word that his colleagues tend to use about him.

The chances are that, sometime in April, The Economist will tell its 1,009,759 readers that it has decided on purely pragmatic grounds that Tony Blair should get another term - although hardly anyone else will notice, or even care very much.