How small banks can grow our economy | Professor Richard A Werner | TEDxWinchester

TL;DR

UK productivity lags behind due to the failure to implement new technologies in daily operations. Small and medium-sized enterprises (SMEs) account for the majority of employment in the UK, but are held back by limited access to funding from large banks. In contrast, Germany's high productivity is attributed to its vast network of small local banks. Increasing the number of small local banks in the UK can drive economic growth, job creation, and prosperity.

Transcript

why is UK productivity low lagging behind even close uh countries in in Europe and what to do about it well productivity is a function of technology and that's where the UK directly doesn't have a problem because there's lots of inventions plenty of patent Reg ations but that just makes it even more puzzling so why is productivity low well you need... Read More

Key Insights

• 👶 UK productivity is hindered by the failure to implement new technologies in daily operations.
• 😀 SMEs play a significant role in the UK's overall productivity but face challenges in accessing funding from large banks.
• ✋ Germany's high productivity is linked to its extensive network of small local banks that prioritize lending to local SMEs.
• 🏦 Increasing the number of small local banks in the UK can unlock economic growth, job creation, and prosperity.
• 👃 The government can establish new commercial banks with local ownership and simplified regulatory regimes to support SMEs.
• 🏦 Simplifying the regime for bank authorization can facilitate the establishment of small local banks.
• 🗾 The creation of small local banks can drive economic miracles similar to China and Japan's experiences.

Questions & Answers

Q: Why is UK productivity low compared to other European countries?

UK productivity is low because the implementation of new technologies in daily operations is lacking. Despite having many inventions and patents, incorporating these technologies into businesses is not happening effectively.

Q: What is the role of SMEs in the UK's overall productivity?

SMEs account for over 90% of companies and two-thirds of total employment in the UK. Therefore, their productivity is crucial in determining the country's overall productivity.

Q: Why are SMEs in the UK struggling to implement new technologies?

The main obstacle for SMEs in implementing new technologies is limited access to funding from large banks. Big banks prioritize big customers and transactions, making it challenging for small firms to secure loans for technology upgrades.

Q: How does Germany's banking system contribute to its high productivity?

Germany's high productivity is partly attributed to its large number of small local banks. These banks prioritize lending to local SMEs, making it easier for them to access funding for technology investments and driving overall productivity.

Summary & Key Takeaways

• UK productivity is low because technology implementation is lacking in daily operations.

• SMEs, which make up the majority of employment in the UK, are hindered by limited access to funding from large banks.

• Germany's productivity is high due to its extensive network of small local banks.

• The UK can drive economic growth and prosperity by increasing the number of small local banks.