Azara Blog: Ben Verwaayen gives lecture in Cambridge

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Date published: 2005/06/01

The Cambridge Communications Research Network (CRN; previously known as the Communications Innovation Institute) sponsored a Cambridge-MIT Institute (CMI) "distinguished lecture" by Ben Verwaayen, chief executive of BT. His talk was entitled "The Game is On" and was given totally verbally, so without Powerpoint, which is unusual in the corporate world.

The point of the lecture was to discuss the emerging challenges to the West (in particular Europe) from the developing world (e.g. China and India). He started out by mentioning the French and expected Dutch rejection of the EU constitution, repeating the common wisdom that this was the public rejecting the ideas of the EU elite. And the whole tone of the lecture was to implore the ruling elite (such as the people in the audience) to put the case better for the global economy, and the resulting changes that would be required if the EU wanted to remain competitive.

He mentioned that, for example, in China there is a real entrepreneurial thirst. But in the EU people were on the whole comfortable, and a lot of workers just wanted to know where their desk was and what their pension was going to be. At the end he said that the people who wanted the EU social economic model to continue (such as supposedly many of the French people who voted against the constitution) had to recognise that someone needs to pay for this. And he could respect people who are anti-globalist, as long as they are willing to accept that Europe would be less wealthy as a result. And he said Europe could indeed choose to be less wealthy, but if that was the choice this should be made clear to the public. You can choose more free time and less wages (the French illogically seem to believe they can have more free time for the same wages).

He said that the common perception that the developing world was just a sink for crap jobs was wrong. They were also creating good, hi-tech jobs. And how many graduates is Europe producing compared to India or China? Although Europe probably thinks it has some of the best universities in the world, that is no longer true, that is only the common perception (and he defined perception to be "reality with a time lag"). For many years the rich West has told the developing world to get its act together, so when it happens it's a bit churlish to complain about it. And Verwaayen saw it as a positive, not a negative, development. (Whereas the anti-globalists see it on the whole as a negative development. Many of the same of course want to perpetually pour vast amounts of money into Africa, whose main effect will be to make Africa permanently dependent on the West.)

He quoted a few odd interesting stories, as one does. Of course you have to take all of these with a pinch of salt, since you can always find examples of anything to back up a case. He said for example, that in a survey of MBA students in the US, over half said they wanted to start up their own business (although, as he pointed out, that might be only what they were saying). A similar survey in France apparently found that only one in seven wanted to, and almost half wanted to work for the government. This is the entrepreneurial challenge that Europe faces.

And apparently 350 thousand people (already) make most of their income from trading on Ebay. So in some sense Ebay is one of the world's largest companies, although these people are not employees in the traditional sense. But this illustrates the blurring of traditional boundaries in economic activities. "We are all both merchants and consumers now".

A lot of the lecture was basic cheerleading. Europe has to be "best in class" (in something) or will get ignored in the global economy. And are we best in class? The general implication was that we were heading one way, and that was downhill. He made the usual complaint that the schools in Europe were not teaching entrepreneurial skill. And perhaps the whole anti-entrepreneurial attitude of the European chattering classes is the main reason we are heading downhill.

He wants the European ruling elite to put the case for change, and said that politicians, universities and corporations all had a role to play. Unfortunately one of the real problems in the UK (and no doubt elsewhere in Europe) is that the chattering classes love to talk about spending money on everything (transport, hospitals, etc.) but never talk about who is going to pay for it. For example, if you listen to the Today Programme on BBC Radio 4 in the morning, you get endless streams of special interest pressure groups pleading for more money for their special interest, and the presenters usually lend them support, attacking the politicians for not spending enough on anything and everything. Of course someone has to pay for this all, and in effect the special interests are asking for the public to subsidise their special interest. As long as the chattering classes refuse to ask the hard questions, the situation will never improve. It's no wonder the public is so economically illiterate.

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