Lessons of Moonshot for the economy
The anniversary of the first Moon landing is an irresistible opportunity for any politician or campaigner. Apollo 11 has come to represent the peak of human ingenuity and innovation, surmounting seemingly impossible challenges at a barely believable pace.
Such intense focus on a single goal raises the tantalising prospect that today’s leaders could harness the same energy into their own projects. “If we can get to the Moon, we can get to net zero,” wrote Sir John Armitt in these pages, on tackling climate change.
Boris Johnson applies the same rhetoric to Brexit: “If they could use hand-knitted computer code to make a frictionless re-entry to Earth’s atmosphere in 1969, we can solve the problem of frictionless trade at the Northern Irish border.”
Re-engineering the world economy to work without fossil fuels, or resolving a political trade row are rather different to the technological challenges of the lunar voyage.
Nonetheless, the space race does offer useful lessons.
It showed almost anything is possible if you are willing to make vast investments of financial and human capital.
Apollo also showed failure to follow through after hitting a big target can lead to regrettable waste. The programme was shut down in 1972 with no sustainable Moon base established. These are important lessons for the big problems facing the economy today, from climate change to an ageing population to weak growth in productivity.
All require more investment, research and development and skills and training – and the will to commit the cash. Sadly, none of these is currently Britain’s strongest suit.
Business investment fell last year
and is expected to drop again in 2019.
Advance economies are now in a new technological race. Like rockets, robots and artificial intelligence sat alongside space travel as staples of Fifties science fiction. Yet the excitement is now tempered by a fear that robots will steal our jobs.
In 2021, Britain will buy 2,600 multi-purpose industrial robots, according to Citibank forecasts. Italy will buy 10,500, Germany 26,000, and South Korea and the US 46,000 each. So much for manufacturing. There might be more hope in services. Banks are investing in artificial intelligence to detect fraud. Despite vested interests, law firms are trialling software to scan the paper documents traditionally examined by trainees. Apps promise to file tax returns painlessly for small businesses.
These do not feature heavily in sci-fi movies but they are important ways to boost productivity, freeing up human workers from routine jobs. That only works if people are retrained to move into more productive roles, however.
Most workers say they have received no training of any kind in the past three years. The majority anticipate none in the next three either. If anything, the rate has fallen in the past 20 years.
Wider innovation is weak, too. The UK ranks 11th in the EU for R&D spending as a share of GDP.
The Government could improve education or invest more in infrastructure. But without a space race-style goal it is hard to inject a sense of purpose into the population. Politicians have most power in removing barriers to private investment. Business confidence is weak – more certainty on Brexit is required, a major challenge in itself.
Tax bills for companies which invest in plant and buildings can rise, hitting incentives to invest. This levy on automation is holding new technology and the nation back.
On training, the apprenticeship levy is often unused as firms struggle to meet its terms. Repurposing it to fund any training scheme could help.
Such measures may not have quite the emotional appeal of a Moonshot. But one small step for each business could translate into a giant leap for the economy.
Watching the watchdog
Auditors face an overhaul. MPS have approved the appointment of Simon Dingemans as chair of the Financial Reporting Council. He will handle the shift to the new regulator, ARGA. But they also had a warning for the former CFO of GSK: “We are concerned Mr Dingemans has not fully appreciated the scale of the challenge ahead, and the degree of commitment required.” Investors should take note. Shareholders often blame auditors when a business collapses, shirking responsibility for their own failed oversight. Some will be tempted to try it again with the new regulator.
The buck always stops with the investor.
‘Freeing up people from routine jobs only works if they are retrained for new ones’