Positive data all round: but don't forget the service industry

Green shoots in this sector are just as important.

Last week’s manufacturing and service sector data caused many sighs of relief, in Threadneedle Street, in Westminster, and also in boardrooms up and down the country, as evidence built of a sustained economic recovery in the UK. However, as is often the case, many were noticeably more enthusiastic about information from the "making things" part of the economy, than from the "doing things" part.

Much of that interest in manufacturing can be attributed to the perception that manufacturers offer the solution to the UK’s trade deficit. However, while it is certainly be part of the solution, the service sector has an equally important part to play in ensuring the UK’s international competitiveness.

The UK leads the world in many specialist and high-quality areas of manufacturing, but we also possess genuine excellence in the services sector. The UK has world leaders in media, marketing, publishing, entertainment, accountancy, law, technology, scientific research, business consulting and more. Those are all industries capable of providing knowledge and expertise at an economically significant level for global consumption, and helping to secure a sustainable recovery for the UK economy.

And to laud our professional economy should not take away from those parts of the service economy that do not export – the retail parks, the high streets and the back offices of our country. Such enterprises are often condemned by those wont to complain that our economy is the weaker for having such a high proportion of service sector businesses, but this is wrong. A manufacturer that does not export still adds value to the economy, and the same is true of a wholly domestic service business.  The contribution of such a business is not measured in the value of exports, but in the efficiency of the business, and the support it can render to its customers in the wider economy. Such businesses are as worthy of investment as any other and, as we plan for a brighter economic future, we will need to plan for the long-term future of both manufacturing and services, and not just those services with an international operation.

So, how should we go about preserving and enhancing the UK’s success in services – to make sure that our international companies compete with the world’s best, and that our non-professional services add the maximum value to the economy? Well, in this case, service industries should take their cue from the manufacturing economy, where leaders have long called for a fundamental change in the skills and knowledge that young people take from their basic education.

Much of the UK’s education system is world-class but, if it is to sustain a world-class economy, then ongoing reforms will need to ensure a greater focus on science, technology, engineering, and maths (otherwise known as STEM) skills. In fact, that is one change that could help secure the successful future of both manufacturing and services. STEM skills are now just as important for service workers as they are for those in manufacturing. The business world is now so reliant on technology that few processes can be properly understood without some knowledge of the enterprise systems and applications that make them possible.

Furthermore, it would be a huge mistake to think that such understanding is only relevant to those destined to be managers and technicians. In my work, I see all levels of the service economy – one day I might be showing a publishing CEO how technology can help her company engage with new audiences, the next I might be advising a telecoms customer experience manager on how to keep his contact centre staff motivated and appropriately skilled. Whether speaking with MBA graduates or school leavers, my team and I see that the skills and knowledge required in the modern workplace are changing quickly.  Whether for a customer service representative being asked to advise on appropriate apps for a small-business phone user, or a lawyer who sees her case turn on the capabilities of data protection infrastructure, some level of technical knowledge is often indispensable.

Successful businesses and successful economies are not just built on good management, but on good work, and good work comes from a workforce with skills and knowledge appropriate to the world in which it operates. If we want the British workforce to be like this, then we should make sure that the foundation for such skills and knowledge is laid at the earliest opportunity.  Doing so will have equal benefits for both services and manufacturing, helping us preserve our global leadership in the creative and professional industries, and making sure that the consumer facing service businesses we use every day remain fit for purpose.

Photograph: Getty Images

Sanjiv Gossain is the SVP & Managing Director at Cognizant

Nicola Sturgeon and Tony Blair. Photo: Getty
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Nicola Sturgeon's SNP, like Tony Blair's New Labour, is heading for a crash landing

The fall of Tony Blair should be a set text for anyone wishing to know what happens next to the SNP.

If there was one thing the SNP and New Labour had in common, it was the hope. Both offered themselves as a burning torch of optimism to publics that had become tired of the same old gang running things in the same old way. Both promised a fairer, more equal society and a fearless embrace of the modern world with an appealing freshness and energy. The voters bought it: both won big, repeatedly.

The thing is, if you’re elected on a mandate to be different, you’d better be different. In many areas, for a long time, New Labour managed to be just that. The smiling PM with the huge majority pushed through radical policies, some of which even worked. Tony Blair’s methodology was so successful and so convincing that the Conservatives and the Lib Dems reshaped themselves in his likeness. Arguably, a form of New Labour won in 2010 and 2015.

But, as they say, it’s the hope that kills you. When the inevitable attritional realities of governing start to weigh, when you make, as you will, bad decisions, when the list of enemies grows long, when you’ve just had your time, you’ll fall like all the rest – only, when you’ve soared so close to the sun, you have that much further to plummet.

The fall of Blair and of Labour should be a set text for anyone wishing to know what happens next to the SNP. Sunday night’s debate between the Scottish party leaders was, I think, a foretaste of what’s coming – a public that until recently was politically and emotionally invested in the Nats is growing restive. In time, this will turn to disenchantment, then anger, then revenge at the ballot box. This is the unbreakable cycle of democratic politics.

Some of us have warned since the start that the SNP had over-promised and could only under-deliver. Its raison d’etre is independence; everything else - literally everything else - is just another brick to build the path. And so education reform cannot be either radical or unpopular, even if it needs to be so to work, because the SNP cannot afford to alienate teachers or the teaching unions or parents. Bricks, you see. Same with the NHS and doctors and health unions and patients. All the separatists have done – all they could have done, given their nature - is deploy the rhetoric of the radical while in reality body-swerving hard choices and conflict at any cost. And where they have found themselves taking flak, they’ve pointed south to Westminster: "it’s no’ our fault, it’s theirs".

But voters show signs of wearying of the predictable blame game and waking up to the time-limited strategy of show-over-substance. Middle Scotland is either ignored or maligned by the middle-class socialists who drive the nation’s political debate, but it is where elections are won. The SNP has secured the support of enough of these people to win every recent election in style, but somewhere along the way the party seems to have forgotten this was a mandate not for independence, but for good government. Ten years in to SNP rule, each new audit of public services seems to wail like a warning siren – things aren’t just not improving, they’re getting worse. The SNP is not keeping its part of the deal.

So, during Sunday night’s debate it was Nicola Sturgeon, not Ruth Davidson or Kezia Dugdale, who found herself in the audience’s cross-hairs. It will have been a strange experience for a woman more used to public adulation and a clamour for selfies. There were the teachers, who complained about the damp squib that is the Curriculum for Excellence, the SNP’s flagship education policy; who pointed out that a fifth of primary pupils are leaving without basic literacy and numeracy skills; and who warned that lowering the standard of exams in order to push up the pass rate was not a mark of success.

Then there was the nurse who said she had been forced to use a food bank (the existence of which has been used repeatedly by the SNP as a stick with which to beat the Conservatives and Westminster): ‘I can’t manage on the salary I have [which is set by the Scottish Government]. You have no idea how demoralising it is to work in the NHS. Don’t come on your announced visits, come in in the middle of any day to any ward, any A&E department and see what we’re up against.’ She delivered the evening’s killer line: ‘Do you think your perceived obsession with independence might actually cost you… in this election?’

The list of reasonable criticisms is growing and will grow further. The ideological obsession with free university tuition for Scottish students is increasingly seen as a sop to the better-off, while in England the fee-charging regime has seen the number of students coming from poorer families climb. Ms Sturgeon’s demand for a quick second independence referendum, when a worried middle Scotland was focused on what Brexit might mean for its future, was tone deaf.

The SNP has another problem (one that New Labour, for all its flaws, didn’t face): its doctrine of infallibility. The Nats’ constitution explicitly prohibits its elected members from criticising the party, its policies or each other. While total unity is useful when you’re on the climb, it starts to look bonkers when the cracks are showing. Allowing public self-criticism, far from being a sign of weakness, is a necessary vent for inner tensions and a sign to voters that a political party is something more than a cult.

That ‘cult’ word has long dogged the SNP and its supporters. The party has tried hard to normalise its electoral appeal while keeping the flame of independence burning bright, but it has been a difficult balancing act. The pro-independence mob is an ugly thing when it is unleashed (and it has suited the leadership to open the cage at times). Claire Austin, the nurse who criticised the First Minister on Sunday, has found herself at its mercy. Immediately after the debate, the Nats briefed (wrongly) that she was the wife of a Tory councilor. The SNP branch in Stirling said Tebbitishly that if she was having to use food banks "maybe she needs to tighten her belt a bit more?" Joanna Cherry, a QC, MP and the SNP’s Home Affairs spokesperson, was forced to publicly apologise for spreading "Twitter rumours" about Ms Austin.

The ravening horde has largely kept its head down since the 2014 independence referendum, but we now see it hasn’t gone away - it is not enough for the SNP’s critics to be debated, they must be destroyed. This isn’t the behaviour of a normal political party: it’s the behaviour of a cult.

I might be wrong, but I have a feeling that when the SNP does fall it will fall quite quickly. Its belief in its infallibility, its inability or unwillingness to do self-deprecation or apology, will increasingly aggravate voters. There is nothing to suggest the current public policy failings will be addressed, and plenty of signs that things will get worse. How, then, do you arrest your fall?

The SNP offered hope and promised it was different, and the voters believed. The sense of betrayal could make for a very hard landing indeed.

Chris Deerin is the New Statesman's contributing editor (Scotland). 

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