The recent performance of our Olympians, in particular the Team GB cyclists and their support team, is in stark contrast to that of the UK economy. We ask if there are lessons for the British government.
The UK economy faces a double-dip recession. Output is stagnant. The Bank of England’s programme of printing money appears to have failed. Interest rates are at a record low, and can not be lowered much further. On 9 August, it was announced that the UK’s trade gap widened sharply in June to its worst level since 1979, when comparable records began, and on 21 August we learned of a “surprise” increase in UK government borrowing in July.
The cause of these problems is due in no small part to excessive reliance since the 1980s on financial services and on North Sea oil and gas. Output of the latter is now declining, and we have learned that the foundations of the former were built on sand, with all the four largest British banks now in trouble, either bailed out by tax payers or at odds with regulators.
Rebalancing the UK economy towards exports may be a way out of this mess, and is one favoured by some politicians and economists. The strategy followed by Team GB’s cyclists shows a way forward. The Team’s performance manager, Dave Brailsford, has focused on “the aggregation of marginal gains”, examining almost every detail of the sport, from the cyclists themselves to their equipment, including streamlining using wind tunnel testing of rider and cycle combinations, tactics, sport psychiatry, hygiene, and nutrition.
In its efforts to restore the UK’s economy to health, the government could do worse than take a look at the strategy used by Team GB’s cyclists. How about aggregating marginal gains from looking at a range features affecting the UK’s economic performance including, of course, the measurement muddle?
It should be said that the reasons for completing the UK’s metric changeover are not primarily economic. UKMA believes that a country needs only one system of measurement, not two, and that one simple system would benefit everyone in the UK, not just business. But we are also certain that completion of the changeover would give rise to improvements in economic performance.
Such gains have been described in numerous reports and recently in the speech by Lord Howe in the House of Lords, so we will repeat only three:
1. School leavers have little facility with measurement of length and distance, having encountered a confusing mixture of imperial and metric when growing up, and so have to be trained to work in metric when starting employment.
2. Misunderstanding, mistakes and disputes occur when parties to a transaction use different systems of measurement. An example is office and commercial buildings which are always constructed in metric but often advertised for letting in imperial. Furthermore, conversion of measurements imposes additional costs.
3. Bridge strikes, caused by drivers unfamiliar with imperial measures, impose a direct and quantifiable cost on the UK economy for the damage caused, and an unquantifiable cost of delay and inconvenience for road users, rail passengers and freight operators.
David Kern, chief economist at the British Chambers of Commerce recently had this to say on the trade deficit:
“It is disappointing to see such a large trade deficit in June Although the monthly figures would have been affected by public holidays, such as the Diamond Jubilee, it is worrying that the trade deficit in the second quarter as a whole was much higher than in the first.
There is no question that British exporters are facing major challenges as a result of problems in the eurozone, but the rebalancing of the UK economy towards exports is taking too long.”
Forget the eurozone – this problem has been in the making since the 1980s.
If the UK government took up this challenge to look for marginal gains, could we expect the UK Department for Transport (DfT) to participate? The DfT must surely realize that the resources available for transport are dependent on the health of the UK economy. Is it too much to hope that it would make a contribution to improving the UK’s economic performance by bringing the units on road traffic signs into line with those used in the rest of the economy? A marginal gain perhaps, but one that could be easily achieved.
Or perhaps, like many others including some politicians, the DfT sees ‘going for gold’ as just too much trouble and would prefer instead relegation and a quiet life.
(Editor’s note: Dave Brailsford was knighted by the Queen on 28 February 2013, and is now Sir David.)