Here’s a great short chapter from Richard Branson’s excellent new book, Like a Virgin, on how to strengthen the economy.
Recent instability in global stock markets reflects the fragility of the economic recovery in the US, Europe and elsewhere. Confidence is low, debt is high, and in some cases, taxes are rising. While the market for goods and services is booming in the so-called BRIC countries – Brazil, Russia, China and India – something needs to be done to restore the confidence that will spur demand around the world. We need a quick economic boost.
This is a key moment for entrepreneurs, a fraternity that invariably seems to shoulder much of the burden in restarting stalled economies. Governments also need to answer the call as they alone can tackle the really big ticket projects.
Here are my top 10 tips for what needs to be done – and who needs to do it.
1. Show us the money
Make sure banks lend the money they’re sitting on, at attractive terms, to small- and medium-sized businesses. Pumping money into new products and services is the best way to deliver more jobs and growth. Who has to do it? Politicians. They bailed out the banks; they need to make sure the banks don’t sit on the key to recovery.
2. Look sharp for investors
Foreign direct investment is a tonic for the weak sectors of any economy but antiquated citizenship regulations should not be allowed to prohibit it where the is no possible threat to national security. Every country needs to revisit its tax incentives—especially those nations in decline. Large multinationals want a skilled workforce and stable political environment; given that, investment, manufacturing and jobs will follow.
3. Improve the infrastructure
When the financial crisis broke in 2008, Barack Obama suggested focusing on relatively small ‘shovel-ready’ infrastructure projects, to supply jobs and kick-start the economy. Fine, but the US needs to roll out more and bigger projects, and governments around the world should do likewise: motorways and railroads to connect cities, increased capacity on railway lines and roads, better airports, new bridges: safe, updated infrastructure works. It will allow companies to move to areas best suited to their needs.
4. Keep it simple
Reducing the red tape involved in hiring new employees and setting up businesses is a no-brainer. Why does the process remain lengthy and expensive almost everywhere?
5. Zoom past fossil fuels
The cost of fuel is rising and supplies of oil and natural gas are uncertain in an increasingly unstable world. Investing in renewable energy will create opportunities for skilled workers, lower costs across the board and assure an energy supply for the next generation. The public and private sectors must work together on this.
6. Adopt ‘talent without borders’
Skilled and enterprising workers are needed in almost every market and sector. Yet employers often must jump through endless bureaucratic hoops to take advantage of the expertise available in the global marketplace. The world is flat now; its workforce is increasingly mobile. Have you set out the welcome mat?
7. Teach people to make things
Germany remains the European Union’s powerhouse because of its very strong manufacturing and engineering capabilities. What’s stopping other countries from borrowing the German model? The US has succeeded in technological innovation, but software and hardware design is increasingly shifting to new Silicon Valleys in India, China and, before long, Brazil. As odd as it may sound in this techno-world, manufacturing is the new ‘new frontier’. We can’t take it for granted anymore.
8. Abandon student ‘warehouses’
In many fields (except maybe in medicine) the duration of university study could be shortened, enabling skilled people to move into the workplace more quickly, and in countries like the US, with a less crippling student loan burden. Colleges have become warehouses, storing students instead of preparing them effectively and efficiently for productive work.
9. Offer flexitime as well as full time
Millions of workers around the world would prefer shorter hours but lack the option. Widespread adoption of job-sharing and flexitime would dramatically reduce unemployment and its associated costs. People who wish to work less—often to spend more time with their families—would be able to do so, and some others would return to the workplace as a result. A win-win. Nothing but tradition is standing in the way.
10. Restore stability
Finally, a plea to leaders around the world: governments must lead the way to a stable financial environment. Interest rates should be set low; money must flow through the banking system. Controls on private enterprise are less important now than encouraging investment. Only this will give rise to the virtuous circle of new companies, new jobs and new markets that in turn will restore confidence and pride in our economies.
That’s it – so let’s get to it!