Economy in Transition
The CMI's Future Forecast survey, based on the views of 1,337 managers and leaders, predicts the business landscape will look radically different in 2020.
77% of respondents believe virtual businesses will be commonplace and 43% suggest community-based businesses will grow in number.
A third agree that by 2020 organisations will have become more employee-centric and a fifth also suggest that more ‘employee-owned' organisations will emerge.
And a report suggests the g rowth of the public sector since 1997 has masked the decline of the private sector.
The researchers, from Manchester’s Centre for Research in Socio-Cultural Change (aka CRESC, oddly), have been trying to quantify the economic contribution made not just by the public sector, but also the ‘para-state sector’ – i.e. those activities which are not technically part of the public sector, but depend on Government revenue or support (like private rubbish collection firms, for instance). According to its estimates, by 2007 this sector employed about 1.7m – about a third as many as the entire public sector.
Between them, CRESC reckons the public and para-state sectors accounted for 57% of the 2.2m new jobs created between 1998 and 2007 – including 81% of jobs for women (partly because there are more part-time jobs available), and up to three-quarters of jobs in ex-industrial regions.
By comparison, the growth in private sector jobs was relatively weak – for instance, the financial sector may have contributed an increasing large slice of GDP, but the number of people it directly employed remained pretty flat over the period (and most of them were in the South-East).
But the flipside is that if public spending is suddenly slashed – as the politicians are now promising – it will have serious employment consequences, particularly for women and the regions. The state is filling in for, not crowding out, private activity the report states. It concludes that places like the North East or the West Midlands have lost an old industrial base and not discovered any autonomous private sector replacement.
The 1997-2008 growth was largely powered by New Labour’s huge expansion of the public sector - an ‘undisclosed and unsustainable’ national business model that relied on using taxation to disguise the UK’s continuing national decline, not least in the private sector.
So that’s at least three structural changes on the way.