Isle of Blight?

Even as Tony Blair – still, in case you had forgotten, the UK prime minister – plays encores around the world, his political obituaries are already being written at home.

Potentially one of the more intriguing comes from Larry Elliott and Dan Atkinson, a pair of business journalists who have written a book called FantasyIsland, extracts of which have appeared in their respective newspapers over the last few weeks.

Elliott and Atkinson assert that in most important respects, Blair’s legacy to Britain will be a dangerous illusion, a sort of mass national daydream that he and his government persuaded the rest of us to go along with.

Nowhere is the illusion more potent, according to the authors, than in respect of our engineering and technology base. They challenge the widely-held view that it is unrealistic for a ‘developed’ nation such as the UK to actually make things, and that we should leave the messy business of production to countries such as China and India while we get on with creating a ‘knowledge economy.’

Elliott and Atkinson point out, not unreasonably, that the Germans, the French and the Japanese continue to produce items that people want to buy. We do not, creating an economy that is hopelessly dependent on the performance of the financial services sector and the housing market.

It’s a persuasive argument, until they begin to define what they mean by the ‘knowledge economy.’ Elliott and Atkinson characterise it as one dominated by advertising executives, lawyers, musicians, film producers and TV scriptwriters.

Don’t expect this lot to sustain an economy of 60 million people, they tell us. And they’re right.

However, there is another type of knowledge economy, apparently overlooked by Elliott and Atkinson, with rather better prospects in the global economy – if it is given a chance to prove its worth.

We are talking about what could (very) loosely be described as the UK’s high-technology sector. Whether in the R&D division of a big firm like Rolls-Royce, an innovative SME on an industrial park, a smart university spin-out or an engineering department research laboratory, there is stuff going on that is the equal or better of anything else in the world.

It is there, and not in the advertising studio or TV production house, that a real knowledge economy could thrive. There are perils, however. Elliott and Atkinson point out the very real danger of complacency in believing that developing nations will remain ‘dumb’ producers without the ability to create a knowledge economy of their own.

They make the telling point that the UK’s education system seems ill-prepared to sustain an array of highly-skilled, knowledge-based industries. In the not-too-distant future, the UK will live or die by its ability to develop the best people here, and attract the best people from elsewhere to these shores. That is where our efforts should be focused.

Andrew Lee