Recession Creates Opportunities, Mandelson Tells Google Zeitgeist

The global financial crisis will change the role of governments, as they regulate the new global economy which will eventually emerge, the UK’s business secretary Peter Mandelson told a business conference organised by Google today.

Mandelson set out his vision of the effect of the recession in a technology-driven globalised economy. He also explored how the government should respond to encourage the economy which would re-emerge after the recession, at the Google Zeitgeist Conference in Hertfordshire on Monday.

The global economy faces several risks from the impact of the financial crisis, said Lord Mandelson: “The risks concern attitudes towards markets in general; and how we understand the implications of globalisation and the credit crunch for the role of government in the economy,” he told delegates at the conference which included business leaders and politicians.

However Mandelson added that the changes wrought by the downturn could also provide an opportunity to rethink how markets are operated and regulated.

“The opportunity lies simply in the fact that we have the chance over the next few years to have an open debate about the way we govern globalised, capitalist social democracies, and to do a better job of governing the global economy,” he said. “For thirty years, the debate about markets and governments has been ideological when it should have been pragmatic.”

Previous speakers at the Google Zeitgeist Conference have included former US President Bill Clinton, former Vice President Al Gore and Conservative Party leader David Cameron.

Mandelson also referenced the Government’s ‘New Industry New Jobs’ report, published last month, which set out the resources and support that are being made available to UK businesses to help them recover from the effects of the recession. “This can mean support for innovation, skills training, technology demonstration and export promotion,” he said. “It can mean committing to upgrade the UK’s digital infrastructure. It can mean using public-private partnerships to ensure that viable and innovative firms have access to early life or growth capital.”

The New Industry, New Jobs report was released in April – just before the Budget. Speaking at the time, Lord Mandelson said the world’s economy is set to double in size after the recession, creating new opportunities for British business. “Global competition is getting tougher and technological change is happening faster. We can’t afford to stand back as other countries invest and skill-up to win in high-value markets and sectors,” he said.

Despite citing the importance of investing in digital infastructure and supporting technology firms, some commentators claim that the budget did not go far enough to provide the support that the UK’s tech sector needs to be competitive.

John Higgins CBE, director general at IT industry trade body, Intellect welcomed some elements of the budget but said more needed to be done. “But significant areas of blank canvas remain,” he said. “Next generation broadband, the crucial new infrastructure demand of the 21st century so far, is given some necessary but nowhere near sufficient help.”

Higgins also said a review of public-private partnerships risked allowing high tech start-ups, who he said could be the “engines of future growth,” to “perish in the cold economic climate”.

Image from World Economic Forum, via Wikimedia Commons.