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The UK government measures against economic decline

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We live in a world of change so at that any moment of time there will always be some industries in decline, but others will be growing. A declining industry, therefore would present no serious economic problems if labour and capital were extremely mobile; resources could move from declining to expanding industries.

Economic growth demands large expenditures on research and development, but this involves great risks, especially in the development stage. The development of the industrial process may cost ten or twenty times as much as the original research.

The government also operates its own research and development institutions, and several government agencies exist to offer advice and help firms introducing new tech­nology (i.e. for innovation). In recent years the government has provided financial assistance towards the costs of devel­opments in micro-electronics, office automation, computer-aided design, robots and aerospace. Financial support for innovation is available for all firms, both large and small.

It is believed that the UK's economic growth and abili­ty to compete in world markets depends very much on the existence of a skilled and adaptable labour force.

Even when unemployment was very high during the 1980s, several sec­tors of

industry were reporting serious shortages of particu­lar types of skilled labour. This was one of several indications that the UK's training effort was lagging behind those of some other industrialized countries. The government has responded to this problem by greatly extending the facilities for training.

The government takes an interest in industrial perfor­mance in many other ways. It has played a leading role in the development of management education and took the initia­tive in setting up the British Institute of Management. It provides a wide range of services to assist exporters most notably with the Export Credits Guarantee Department which, by providing a kind of insurance against the possibil­ity of default by overseas buyers, reduces the risks attached to trading overseas.

Many authorities hold the view that the relatively slow growth of productivity in British industry was at least partly due to constant changes in government economic policy which, by creating uncertainty, made firms very cautious about embarking on expensive modernization pro­grammes. In the 1960s the government attempted to deal with this problem by setting up some machinery to assist with long-term planning. It established the National Economic Development Council with members drawn from the trade unions, the employers, and the government. Its task is to propose measures which would remove obsta­cles to economic growth and improve Britain's economic performance. Its proposals aim to provide some basis for the government's economic policies, and the setting out of its findings, it is hoped, will encourage industry to frame appropriate development plans.

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