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

Photo: Getty
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The chlorine chicken row is only the beginning – post-Brexit trade deals won't be easy

The real problem isn't the bureaucracies of the EU, but the fears of voters.

What's wrong with a little bit of chlorine in the chicken? That's the question splitting the cabinet as far as a US-UK trade deal goes. It also goes to the heart of Britain's post-Brexit dilemma.

As far as public health goes, both chicken slaughtered and sold the American way and chicken in the United Kingdom and the European Union are just as hygienic by the time they end up in supermarkets. But banning chlorine-washing means that the entire production chain, from farm to abattoir, has to be cleaner in the UK and the rest of the EU than in the States, where farmers know that no matter what happens to the chicken, that chlorine bath will absolve all manner of sins.

The EU's own research concedes that there is no public health difference. The problem, both in the rest of the bloc and the UK, is voter resistance: among French farmers and shoppers across the EU27. We all know how British people are about animal cruelty – not that they're so het up they won't actually eat them you understand – and any change that makes it easier to treat animals worse is going to be politically painful for the government.

In the long-term, changing our regulations to US standards also makes it harder to sell into the European Union. It's not a choice where you can have the best of both worlds but one where ultimately one market may preclude the freest use of the other.

And without wishing to offend any poultry farmers among our readership, this is a fairly small issue as far as the average British voter goes, even allowing for the UK's thing for animals. Just wait until things like “the NHS” start to be used in the same paragraph as the words “trade deal”.

One criticism that Brexiteers make of the EU is that it takes such a long time to strike trade deals. But the real problem isn't the bureaucracies of the EU – but the fears of voters. A cabinet clash over chicken is only going to be the beginning. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.