6 November 2017

Event

#CBI2017 Annual Conference Business Debate: How to ensure globalisation is a positive force?

Business leaders from the OECD, Ford Motor Company, the University of Oxford, Vista Equity Partners and CLAC discuss the opportunities and challenges of globalisation

#CBI2017 Annual Conference Business Debate: How to ensure globalisation is a positive force?

BBC’s Business Editor Simon Jack kicked off the debate by reflecting on some of the opportunities and challenges that globalisation has brought about.

He was followed by the OECD’s Secretary-General, Ángel Gurría, who reminded the business community that nearly a decade after the worst economic crisis in recent history, the UK is finally escaping the low growth trap.

While this is welcome news, we must now turn our attention to those countries that have not reaped the benefits of globalisation, and who are still experiencing poverty.

Have we reached a peak in the globalisation process? Has globalisation stalled? Can government and business work together to find solutions to the challenges of globalisation where they arise?

These are just some of the questions that helped frame the debate around how we can take steps to create a global Britain which ensures that the benefits of globalisation are shared by people and communities across the UK.

Key takeaways:

  1. “Over a quarter of UK workers have low skills, thus labour productivity is stalling.”

There was a consensus across all of the speakers that the UK is facing a skills crisis that must be addressed immediately, or else we risk falling behind the rest of the world.

The skills gap has led to slower growth in labour productivity. It takes a German, a Dutch, a Dane, a French or an American worker, four days or less to produce what the UK average worker makes in five days.

The strength of businesses like Ford lies in their ability to build skills. Steven Armstrong, Group Vice President and President of Europe, Middle East and Africa, Ford Motor Company, said that they will continue to create high value and skilled jobs in all the markets that they operate in.

The skills crisis will be further amplified by AI and automation. Businesses must therefore take steps now to ensure that, when going into the 4th industrial revolution, workers are skilled and ready to ride the new wave of innovation.

Robert F Smith, Founder, Chairman & Chief Executive, Vista Equity Partners, added that today, the currency of business is intellectual property. Businesses therefore have a duty to invest in their employees through targeted training programmes and investment in R&D.

  1. “There is a big regional divide, with regions outside the South East of England lagging behind the rest of the UK.”

One thing is clear, globalisation has brought many benefits to our society, and has lifted many out of poverty worldwide. However, the benefits have not been shared equally and this has led to a backlash against globalisation.

These inequalities harm growth and erode people’s trust in government, markets, business and our democracy. We must start by tackling these problems regionally. The UK Government’s modern Industrial Strategy is therefore timely and a great step towards resolving local and regional issues such as skills.

  1. “While living standards have raised in many Western democracies, there are striking levels of in-work poverty and many people on lower incomes are struggling to make ends meet.”

Globalisation has created more and better jobs and has improved the quality of life of many people. However, despite the rise in living standards, people on lower salaries in industrial countries are still losing out.

This is compounded by the fact that governments and businesses in western countries are not trusted to deliver solutions to these inequality problems.

  1.  “The lack of clarity around the future of trade is causing uncertainty and this will result in slower growth for all businesses.”

Commenting on transition, Ángel Gurría said that we shouldn’t put a time limit on transition. He said that it should last as long as we need to make a seamless transition.

Steven Armstrong stressed that Brexit is a serious issue that could have a negative impact on Ford’s competitive footprint in the UK.