At the heart of the government’s industrial strategy is a commitment to increase overall UK investment in R&D to 2.4% of GDP in 2027. Currently investment stands at 1.67% of GDP. So this has got to be a good thing? Actually this target is not very ambitious when measured against comparable countries and this lack of ambition is likely to affect the future prosperity of people living in the UK.
A comparison between the UK, France and Germany using OECD data shows that the UK has invested less in R&D than France as a share of GDP since 1986 and less than Germany since 1980. These differences are large and have persisted over a long time. It is perhaps worth noting that the share of R&D spending in GDP for the United states has always been above 2.4% and recently has been at around 2.7%.
China’s recent emergence in the world economy was underpinned by a massive process of labour reallocation delivered by the country’s nascent labour market. After several decades in which labour was allocated and rewarded centrally, according to communist principles, a number of market-oriented reforms led to greater flexibility and responsiveness to demand and supply. Given the large pool of underemployed workers eager to increase their incomes, in particular in rural areas – over 150 million people according to some estimates –, the potential for growth from industrialisation and exports was considerable.
What is the political economy of monitoring pollution in China? Should we be using relative or absolute measures of inequality? What are the economic implications of stigma? Have skills and human capital a long term effect on local economic conditions? Is there intergenerational mobility in Africa? Is the millennium missing out in rising prosperity? These were some of the questions raised by CGR and guest researchers during the annual Workshop on Political Economy and Economic Development and during the Annual Globalisation Seminar hosted by the Centre for Globalisation Research on the 9th of November, 2018.
This note summarises the research presented in a policy workshop held last week in Brussels. The studies were conducted under the ‘Economic Analysis of Collective Bargaining Extensions’ (CoBExt) project, funded by the European Union, and focused on the cases of Greece, Italy, Portugal and Spain.
In my introduction, I presented a comparison of collective bargaining (CB) across the four countries. Despite generally low trade union density rates, particularly in the private sector, these countries exhibit very high CB coverage, precisely because of widespread and nearly automatic (explicit or implicit) extensions. The exceptions to these practices were Greece and Portugal but only during their adjustment programmes, when extensions were entirely suspended (Greece) or made conditional on representativeness criteria similar to other EU Member States (Portugal). In Greece, firm-level CB agreements were also boosted through the suspension of the favourability principle, which allowed for greater differentiation in working conditions across firms.