When cool Britannia meets hard-headed economics

Britain's Brain gain

Related Topics
Two little snapshots from the past week. First, I was walking across Canary Wharf station when a youngish City economist I know bounded up to me. I have seldom seen anyone quite as cheerful. "I've just been sacked this morning," he beamed. "What do you reckon my chances are of doing some writing in the newspapers?"

Knowing the fragile state of most newspapers' finances I replied warily that, provided he didn't mind not being paid very much, I was sure the papers would love to have him on board. "Oh, I'm not worried about the money," he said - and of course I then realised why he was going around like a dog with two tails. He had made enough money, so he didn't really need to work again. Now he could do what he wanted.

The second insight came in the weekend papers where there was a spate of stories about the magnetic effect that Britain, and London in particular, is having on young continental European professionals. The jobs are here. This is partly a City phenomenon, for many of those jobs are in financial services. It is partly a tax phenomenon, for this is the only place in Europe where highly paid workers can legally keep most of their earnings. (The "legally" is important - the German banks are losing swathes of their top directors who are forced to resign following the exposure of their tax fiddles.) As a result London is the only place in Europe where ordinary professional people can become rich through salary - the only place where thirtysomethings such as that City economist can make enough to be free to do what they like for the rest of their careers.

But according to the recruitment consultants, the lure is not just the City or tax. Other professionals - foreign doctors and lawyers, for example - are flocking here. And further down the pay scales young foreigners are working in the great mass of service industry jobs, in hotels, hairdressing salons, shops and the like. Why?

It is too new a phenomenon for us to be clear quite what is really happening. Part of the draw must be cyclical. We are up; they are down. The high unemployment levels in continental Europe bear particularly hard on the young. Whereas young people just out of university here can usually get some sort of job, though maybe not the sort they would ideally like, there simply are no such opportunities in many parts of the Continent. This is particularly evident in professions there which have, so to speak, "over-trained" - pumped out too many trained people for the jobs available. Medicine is a good example.

Part of the phenomenon is a function of the freeing of the EU labour market. This affects continental Europeans much more than us. While our young might want to spend a year or two in Paris or Rome, the move would be mainly for fun. Scandinavia would be fun too, for no one is going to go there to make money. (Ericsson recently mooted that it might move its headquarters out of Sweden because it could not get foreign nationals to work at its HQ.)

Even leaving the money aside, a Briton seeking career development would probably find it most useful to spend time in the US, if he or she can get around the visa restrictions, rather than go to France or Germany. From a continental European perspective, on the other hand, Britain is an effective career option. The States might be even better, but since many US firms use the UK as their regional base, coming here is a useful building block of a professional career.

All these factors would be sufficient to account for the pull, but I think there is something more: the cultural and media buzz. No one should take their own publicity too seriously, particular when that publicity is fostered by politicians, but there may actually be something in the "cool Britannia" image projected by Mr Blair and his colleagues.

There is a two-way link between money and culture. This country has now completed six years in which growth, every single year, has been higher than that of France or Germany (and in every year but one, higher than Italy too). As a result a lot of people have made a lot of money. Thousands will have made enough to retire on, but even people who have not made the big piles will have some surplus to devote to enjoying themselves. And for many people that means spending money on culture. There is a practical limit to the amount of restaurant meals you can consume, and when people have had their fill, the surplus often goes on cultural activities of all sorts.

Not everyone wants their art to be a plain white canvas, a pile of rubbish, or a pickled animal; but some do. Not everyone wants their theatre to be experimental; but some do. Not everyone enjoys the club scene; but some do. The great engine of economic growth is generating demand for a variety of fun activities, and the market is creating products to meet that demand. The explosion of culture is a response to the money; but the existence of cultural activities reinforces the sense of excitement, which in turn generates more economic activity.

The result is a series of virtuous circles. Growth generates wealth which improves services which generate yet more wealth. Foreign talent coming to Britain makes the country more interesting, which in turn attracts more foreign talent. The more international the economy becomes the larger the pool of talent, and the larger the pool the more attractive Britain becomes as a place to invest. We are reaping the benefits of a brain gain - the opposite of the brain drain of the 1950s and 1960s.

Will it last? No, of course it won't. You can see little patches of weakness at the moment - the job losses in the City, for example. Those patches will grow. Meanwhile the present levels of unemployment on the Continent will not last - those societies cannot function with year after year of 12 per cent unemployment. So the extreme imbalance that exists at the moment, where the UK is the only big jobs engine in Europe, will disappear. There will, nevertheless, be a lasting benefit.

We are lucky to be enjoying the benefits of the work of talented and energetic young people from elsewhere in Europe. We should recognise our good fortune and hope that we are giving these people something useful and lasting in return.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

Read Next
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month  

General Election 2015: Politics is the messy art of compromise, unpopular as it may be

David Blunkett
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012  

Vote Tory and you’re voting for the rich to get richer and the poor to get poorer

Mark Steel
General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'