Investors need to be ‘patient’, not greedy

In an article by Dr Paul Benneworth, Senior Researcher at the Center for Higher Education Policy Studies, University of Twente in the Netherlands claims that: “German companies, often envied by the UK, take a long-term view and plough the bulk of their surpluses into investment”

Their workers also accept wage moderation because they see that profits are kept low to fund these investments and future growth

Workers and owners thus co-operate and accept less cake today but a bigger share of a  bigger cake tomorrow

In contrast, UK owners have typically extracted maximum profits by minimising investment and wage growth, and that has made many workers militant

The UK industrial power needle keeps swinging from one side to the other – from factory/ capital owners to Trade Union leaders such as Red Robbo (British Leyland) and Arthur Scargill (National miners) in the 70s/ early 80s, then back to capital owners in the late 80s/ 90s thanks to Thatcher legislation and, again, many are abusing their positions and fleecing their companies at the expense of their employees and the nation


There are examples galore of this, from the Rover Cars to Carillion today where senior UK executives load up their companies with debt, award themselves huge and unjustified pay rises, pay out mega-dividends to shareholder, including themselves, then declare the company bankrupt and flog off remaining assets for cash

In addition, as soon as a fledgling business takes off, we allow it to be sold to foreign owners – jobs and future profits are thus lost – ARM, the micro-chip designer, is a recent example – a few senior managers pocket all the spoils whilst the nation, which provided much on which their success relied, is left with nothing and has to start again creating more job opportunities and increasing the wealth pie for all

Patient money is the answer – not money for sickly firms which deserve to die but money from investors who will be patient and only seek long-term paybacks, not quick bucks

Nissan has shown what a British car company can achieve (versus Rover) when ‘patient capital owners’ are paired with North East workers, an area crying out for investment in new industrial companies since the demise of much of the chemical, steel, shipbuilding and coal mining industries there

Nissan (Sunderland) is now one of Europe’s most productive car plants and has been rewarded with wave after wave of investment, job creation and rising wages

The same patient approach is needed right across the country, We need a sea change in how we invest in business – and we need it now!


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