NATIONAL > The UK is part of the value
Published: Tuesday, 09 Feb, 2010
Inward investmentis good for an economy but we, perhaps, need to better define what we mean by the term. Simply buying acompany that holds among its treasures an iconic global brand is not inward investment. Given the global predilections of modern economic pronouncements, that sort of thing is bound to happen but
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Inward investmentis good for an economy but we, perhaps, need to better define what we mean by the term. Simply buying a company that holds among its treasures an iconic global brand is not inward investment. Given the global predilections of modern economic pronouncements, that sort of thing is bound to happen but the long term outcome of such a move is nearly always a drift of work, intellectual capacity and value away from the UK. So, when prospective purchasers and new owners piously promise to retain productive capacity in the UK, try throwing them a frisbee to see whether they can uncross their fingers in time to catch it. Often they won\'t because, by \'retain productive capacity in the UK\' they mean \'we might carry on buying the boxes over here\' but the real work will move.
Sometimes, as with the Kraft takeover of Cadburys, moving production of goods for the home market will be a little more difficult - you couldn\'t really justify the cost of airfreighting a bar of chocolate to the UK unless you are Mariah Carey. But for those exported products with which Cadbury added to the UK\'s trade receipts, it might well be easier to take a Kraft factory nearer to the market and boost its productivity with a line from the Cadburys range while reducing labour and transport costs. With a brand like the Land Rover, Jaguar business that Tata has bought, it\'s probably safe in the short and medium term while UK based prodction still carries some cachet.
Inward investments must either add a new business and its output to the UK economy or it should save a company operating here from failure and closure. Great examples wopuld be the Nissan, Toyots and Honda plants which created productive capacity from scratch in the UK or the Mini business where BMW breathed new life into a dying plant, lifting it from decline to a new world brand.
That is true globalisation of the sort that blends the best capabilities of different countries and businesses to create a new whole that is greater than the sum of its parts. Just because the economy is in a state today, doesn\'t mean that we want a fire sale of the nation\'s value to finance the short term at the expense of the capacity to be productive and generate revenue over the long term.
No country is more welcoming to inward investors than the UK but that welcome assumes that they plan to add value to the country not simply strip its assets and leave a raw space where once was productive capacity.
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