Why are Industrial Strategies always such stinkers?
The British Government has announced its Industrial Strategy. The problem being that it's the same as everyone elses' industrial strategy ever. A rag bag of whatever is thought to be fashionable or politically appealing at the time with nary a hint of any actual strategy to it.
Now it's entirely true that we're opposed to the very idea, insisting as we do that the structure of the economy is something emergent from the interactions of people within it. But even so this latest one is a stinker.
For example, we're told that the entire nation is going to be wired up to 5G, there will be superfast broadband everywhere. OK. We're also told that there will be a superfast rail network covering the country. Entirely missing the already proven point, that internet access everywhere destroys the economic case for fast trains.
Yes, we do already know this - they've already been told to go back and do the numbers for HS2 again.
To explain for those who don't know. In a cost benefit analysis the value of a faster train set is the time saved by those travelling upon it. Business travel is assigned a significantly higher value per hour of travel time saved than leisure. On the grounds that if business types were not travelling to do business they would be in an office somewhere doing business. We wouldn't swear to these figures but £50 to £60 an hour for business types, £10 to £12 for leisure travel is about right.
The economic case for higher speed trains depends very heavily on those higher values for business travel. Both the values and the number of people.
But here's the catch - those numbers come from how the world was decades ago. Including the assumption that being on a train means being unable to do business, one can only sit there travelling to do business. No one who has actually been in a first class compartment in the past decade or two can possibly believe that this is how people work today. Mobile phones, then mobile internet (yes, trains do have it these days) have entirely changed that. Work is done on the move. In fact, scratch a regular traveller and you might well find an agreement that travel time is more productive these days.
Thus the major (and yes, really, it is *the* major) benefit in our cost benefit analysis of fast train sets does not exist.
That is, if we wire the country so that the internet is available anywhere and anywhen then we've entirely destroyed the economic case for fast train sets.
Which brings us back to industrial strategies. The claimed argument in favour of them is that they allow joined up government and planning. Yet in practice they always, but always, include stinkers like this. We must spend tens, if not hundreds, of billions on fast train sets when we've just made them redundant by wiring the country instead. This is not big, not clever and not joined up.
It is, instead, just a repeat of the ragbag of the ideas generally thought to be fashionable or politically appealing.
Better, we are certain, to leave the economy to be emergent from the interactions of the people within it than insisting on spraying the wealth of the nation up against the wall in this manner.