Friends of Europe discuss taking innovation to developing countries
27 Jan '06
4 min read
Finally, John Monks wondered how the number of losers could be minimised, directly challenging Mr Rashbass' ideas on free trade. 'For the young and affluent, a global society is a great thing. However, for the average blue collar worker, this is not the case at all. While education is important, it is a daunting prospect for those in shrinking industries now. Big companies find globalisation good news, and there is no bigger red carpet than to China. Profits are high, but more regulation is necessary. Raising standards could be the key to investment.'
Mr Rashbass warmed to his theme, pointing out that in economic terms, there are no losers. 'Is growth a zero-sum game? Does one trading partner grow at the expense of another? If you take the example of trade with India - both sides benefit. When a single Indian area grows, the whole economy does and net growth is positive, not zero-sum. There is a role for government to give a safety net to the losers, but if you start from the premise that trade is good, then you start to think how you will make that happen. Globalisation causes the global GDP to grow, including in the rich countries. If you try to put up fences, everyone loses.'
Mr Smith sought to place government back in the mix: 'Only the government can put up certain fences, for example in education. The market does not address basic research. Governments need to invest more in basic research and countries that do this will succeed. In technology areas, governments do need to fill the gaps. By the end of the century, the uncertainties of wealth will lessen. This is evidence of a flattening world,' he said.
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