10 tips to revive the economy4 min read . Updated: 12 Sep 2011, 10:32 PM IST
10 tips to revive the economy
10 tips to revive the economy
Recent instability in global stock markets reflects the fragility of the economic recovery in the US, Europe and elsewhere. Confidence is low, debt is high, and in some cases, taxes are rising. While the market for goods and services is booming in countries such as Brazil, China and India, something needs to be done to restore the confidence that will spur demand around the world. We need a quick economic boost.
This is a key moment for entrepreneurs. They always shoulder much of the burden in restarting stalled economies. And for governments, too, because only they can tackle the really big projects.
Here are my top 10 tips for what needs to be done within the next 12 months—and who needs to do it.
1. Show us the money
Make sure banks lend the money they’re sitting on, at attractive terms, to small- and medium-sized businesses. Pumping money into new products and services is the best way to deliver more jobs and growth. Who has to do it? Politicians. They bailed out the banks; they need to make sure the banks don’t sit on the key to recovery.
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2. Look sharp for investors
Foreign direct investment is a tonic for the weak sectors of any economy. Every country needs to revisit its tax incentives—especially those nations in decline. Large multinationals want a skilled workforce and stable political environment; given that, investment, manufacturing and jobs will follow. Write your president or prime minister.
3. Improve the infrastructure
After the financial crisis broke in 2008, US President Barack Obama suggested focusing on relatively small “shovel-ready" infrastructure projects, to supply jobs and kick-start the economy. The US needs to roll out more and bigger projects, and governments around the world should do likewise: The projects deliver tremendous benefits in a short time. Highways and railroads to connect cities, increased capacity on railway lines and roads, better airports, new bridges: safe, updated infrastructure works. It will allow companies to move to areas best suited to their needs. Are you listening, governments of the stalled economies?
4. Keep it simple
Reducing the red tape involved in hiring new employees and setting up businesses is a no-brainer. Why does the process remain lengthy and expensive almost everywhere?
5. Zoom past fossil fuels
The cost of fuel is rising and supplies of oil and natural gas are uncertain in an increasingly unstable world. Investing in renewable energy will create opportunities for skilled workers, lower costs across the board and assure an energy supply for the next generation. The public and private sectors must work together on this.
6. Adopt “talent without borders"
Skilled and enterprising workers are needed in almost every market and sector. Yet employers often must jump through endless bureaucratic hoops to take advantage of the expertise available in the global marketplace. The world is flat now; its workforce is increasingly mobile. Have you set out the welcome mat?
7. Teach people to make things
Germany remains the European Union’s powerhouse because of its very strong manufacturing and engineering capabilities. What’s stopping other countries from borrowing the German model? The US has succeeded in technological innovation, but software and hardware design is increasingly shifting to new Silicon Valleys in India, China and, in time, Brazil. Manufacturing is the new “new frontier". We can’t take it for granted anymore.
8. Abandon student “warehouses"
In many fields, the course of university study could be shortened, enabling skilled people to move into the workplace more quickly, and in some countries, without so much debt. In almost every area except maybe medicine, the usual three or four years of study could and should be reduced. Colleges have become warehouses, storing students instead of preparing them effectively and efficiently for productive work.
9. Offer flextime as well as full time
Millions of workers around the world would prefer shorter hours but lack the option. Widespread adoption of job-sharing and flextime would dramatically reduce unemployment and its associated costs. People who wish to work less—often to spend more time with their families—would be able to do so, and some others would return to the workplace as a result. A win-win. Nothing but tradition is standing in the way.
10. Restore stability
Finally, a plea to leaders around the world: Governments must lead the way to a stable financial environment. Interest rates should be set low; money must flow through the banking system. Controls on private enterprise are less important now than encouraging investment. Only this will give rise to the virtuous circle of new companies, new jobs and new markets which, in turn, will restore confidence and pride in our economies.
By NYT syndicate
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog.
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