Inclusive capitalism is the best way forward for UK
17 Oct 2018
This article written by Nigel Wilson appeared in the Daily Telegraph on 17 October 2018 and talks about equity investment and the need to invest in technology and skills, improving productivity and wages.
A global leader was recently asked what advice he gives to young people in Britain. His reply was “go to the US or China – that is where you will enjoy the most success.”
This gloomy prognosis is not one I share. All over the UK we are seeing great examples of entrepreneurial flair, including globally leading science and technology within our great universities.
But his comment highlights issues that need more prominence if we are to drive growth through and beyond Brexit. Much of the political debate this autumn has been driven by the extent to which growth is shared between capital and labour. The share to labour has fallen globally for 30 years: average real wages have barely moved, and this looks unfair. The causes include globalisation, changes to markets, regulation and technology, combined with corporate short-termism.
We need stronger companies and stronger sectors. Decades ago, we saw the demise of the UK’s larger brewers. We saw Cadbury bought, former tech leaders such as Sky, Friends Reunited and LastMinute.com, Deepmind, ARM Holdings and GEC disappear or be acquired. Unilever tried to leave. The market capitalisations of our blue-chip shopkeepers – such as Tesco, Sainsbury and Marks & Spencer are sharply lower than just a few years ago.
It is a truism that equity finances the future, debt the past. We need more shares and more capital, wisely invested, if we are to reverse the ever-increasing gap between the UK, the US and China.
Nigel Wilson, CEO, Legal & General