How the UK shapes up in the global economy is the theme of this year’s
Marketing Forum. Andrew Seth charts the course
The Marketing Forum, upgraded this year by Richmond Events to the
Oriana, has become a key date in marketers’ calendars.
Its purpose is to provide the best environment in which marketing buyers
and sellers can meet in a style that makes business happen, to an agenda
chosen by delegates themselves. This year they chose ‘Benchmarking
Britain’, to look at how we were doing in key business and marketing
areas against global competitors.
Competitiveness, assessed nationally, is a well-researched subject.
Michael Porter’s sardonic conclusion that Britain’s sole areas of global
clout were alcohol and leisure goods is now some years old. Management
shakeout has meant that many of his readers are probably now a lot
closer to both markets than they might have chosen to be. After Porter
came Hamel and Pralahad, who have been equally downbeat about British
and now European prospects.
We can ignore the business teachers, but we can’t ignore the facts. This
year’s World Economic Forum’s (WEF) review of 49 leading world nations
uses well-established research methods and models.
The headlines are that little countries wallop big ones, largely because
they get on with the business of making and selling things, rather than
expanding the costly and ever-widening reach of government.
Singapore, Hong Kong and New Zealand get the three big medals, while in
Europe, Denmark, Switzerland and little Luxembourg all leave Britain
standing. Britain has narrowed the gap with mainstream Europe, largely
because Europe has itself been catching the so-called British economic
While our post-Thatcherite institutions are coherent and our financial
markets disarmingly open, we remain high-cost and over-regulated. We
have inadequate infrastructure and, in the areas of most direct interest
to business managers, Britain is firmly in division two for technology
and is sadly out of the premier league (16th place) for the key
criterion: quality of business management.
‘Physician heal thyself’ may not have been the message that the Forum
delegates were looking for, but it’s probably one they’re going to get.
Overall, UK PLC is in 15th place.
Just as we nerve ourselves to take on and integrate with the European
Union, we find the whole of the EU drifting backward in economic
competitiveness - as Yale’s Paul Kennedy in The Rise and Fall of the
Great Powers said would happen if Europe carried on its internal
Social welfare systems developed in the post-war period of a ‘New
Jerusalem’ over-confidence are proving too heavy a burden for Europe to
fund. Five of the six most competitive nations are open economies with
small governments, low tax rates and an ability to generate the
entrepreneurial approaches and innovative results associated with the
Pacific Rim markets.
New Zealand’s crusading reformist policies have turned the country from
yesterday’s low-margin farm exporter to today’s well-diversified, high-
margin producer. It takes Taiwan, an ‘Eastern Tiger’, to prove to us
that single-minded worship at the free-market altar doesn’t work. Taiwan
has a series of practical incentives and measures to ensure national
competitiveness. This is interventionism on a grand scale - something
Britain’s economic planners jettisoned with contempt two decades ago.
In contrast to Europe, east Asia’s economic performance has been
dazzling. They have succeeded in catching up rapidly with advanced
nations’ living standards and aspirations. In the past five years, all
but two of the world’s ten fastest-growing nations have been in east
Asia. These economies, led by Japan and the little dragons (Hong Kong,
Singapore, Korea, Taiwan), pursued single-minded export growth
strategies, open-door investment polices, constrained government
spending and high savings rates.
But it isn’t government or fiscal policy which stands out most clearly
to differentiate the dragons; it is a long-laid, deeply felt and
ruthlessly implemented emphasis on education and investment in human
capital. Coupled with unmatched labour-market flexibility and a growing
belief in R&D and technology, it is learning advantage, the knowledge-
creating company that has kept unemployment in the Pacific countries
astonishingly low: at about a quarter of mainland Europe’s.
So there are hard lessons to be learnt by UK management: the home team
needs radical overhaul. Despite recent Heseltine-led competitiveness
initiatives, nothing significant has changed. We may be mastering the
language, but performance has yet to respond. It’s the long-term
standards that matter. We certainly haven’t grasped this yet as a
nation. It will be interesting to see whether the marketing leaders
attending the Forum feel any different from their peer group.
They will certainly know that UK business, and particularly its
marketing people and practice, has to play a key role in lifting our
game. We perform especially poorly in the area of business management.
Entrepreneurship and innovation are key marketing areas and see us in
the bottom third of the WEF’s measured nations (38th out of 49). In the
other key marketing-driven areas, we paddle in gently below the race’s
* Customer orientation 25th
* Time to get to market 27th
* Time to innovate 23rd
* Total quality approach 6th
* Strategy implementation 22nd
Weren’t some of these disciplines pioneered in Britain’s marketing
companies? Years of dedicated downsizing and delayering have left the UK
in an appalling 35th place (bottom third!) for ‘supply of competent
managers’ - it’s heartening that 1000 of them are still around to spend
two days on a boat together. In Europe, we are in 15th place for
competent management supply, ahead only of the former Eastern bloc
countries, a scarcely credible rating.
There is one further and perhaps more critical area. Overall, our
education system comes 35th out of 49 in the world, 40th in business
training (bottom in Europe) and our availability of skilled labour 34th,
again rock bottom in Europe. We also have motivational deficiencies on a
grand scale: workforce motivation, 26th; incentive to succeed, 43rd; and
belief in the values of competitiveness itself, 32nd.
We must generate a perception that the whole population has a stake in
the improvement of economic performance. If this is stakeholder
capitalism then Britain needs a much bigger dose of it. Singapore, Hong
Kong and now, apparently, New Zealand have all learnt the lessons.
Marketing Forum delegates will hear once again, on film, from Will
Hutton, author of The State We’re In and now the editor of The Observer.
There will be marketing success stories which have started to lift
British standards. My colleague Chris Wood used Patrick Head at Williams
in last year’s session and we will hear from him again.
Big companies will be represented: Tesco, which has been making the
running in grocery retail, and Pillsbury for instance. But small
companies have also made their mark: Time Out magazine for one.
Innovation from new sectors - countries, towns and national institutions
- will be considered. Innovation is nothing more than an attitude of
mind, a process of human resource leadership and development. But we
have to engender it, stimulate and nurture it, and keep it alive through
practical experience and development.
The conference should itself be stimulating and it would be premature to
try to reach conclusions at this stage. However, I forecast these will
play a part:
* Consistent, long-term, strategic goals
* Reorganising best standards on a global basis
* The case for radical change, with growth as the key business priority
* The pursuit of innovation in a strong branded context
* Giving priority to company-wide learning cultures
* Developing aspirations to deliver the possible and - sometimes - the
I said that innovation was an attitude of mind, a set of committed,
strategic aspirations sometimes opposed to the predictions of experts.
Of these, my favourite must be from Charles Duell, who noted at the turn
of the century: ‘Everything that can be invented has been invented.’
Oriana delegates will hope to do better than such statements. But they
know their real benchmarks k are a shade tougher.
Quality of Business Management
Attribute/Leading three countries UK ranking UK and Europe
Entrepreneurship/Innovation in companies 38 15
1. Switzerland 2. Hong Kong 3. Sweden
Risk-taking/Individual initiative 14 1
1. Chile 2. USA 3. Hong Kong
Willingness to delegate 14 6
1. New Zealand 2. Sweden 3. Denmark
Information technology 22 8
1. Finland 2. New Zealand 3. Singapore
Customer Orientation 25 13
1. New Zealand 2. Japan 3. Korea
Time to innovate 23 9
1. Hong Kong 2. Chile 3. Japan
Time to market 27 11
1. Hong Kong 2. Japan 3. Singapore
Total quality management 26 13
1. Japan 2. Switzerland 3. Norway
Implementation of strategies 22 9
1. Switzerland 2. Hong Kong 3. Sweden
Market Dominance (by a few companies) 12 7
1. Chile 2. Japan 3. Belgium
International experience of senior management 9 7
1. Austria 2. Hong Kong 3. Turkey
Organisation of workplace efficiency 15 10
1. Denmark 2. Sweden 3. New Zealand
Supply of competent managers 34 15
1. Philippines 2. France 3. USA
Non-wage incentives to motivate employees 34 16
Source: 1996 World Economic Forum report