Building on success: Ali Parsa

26 March 2015

A few decades ago, Britain was among the top five most prosperous countries in the world.  We started this decade at number 28, just one spot ahead of Greece, in the UN Human Development Index, a measure of living standards, life expectancy and education. In a similar 2013 study, The Economist ranked Britain as the 27th best place in the world to be born, again a massive drop from where we were only a couple of decades before. A baby born in Britain in 2013 is not just projected to have lower prospects than those born in the USA, Canada, Germany or Japan, but also those born in Ireland, South Korea, Cyprus and Chile.

Yet in Britain we have a great heritage of winning globally. We were among the biggest beneficiaries of the first wave of globalisation that began in the 19th century.  We won then largely because our economy was more enterprising and our enterprises more innovative than those in other countries.  When that phase came to an ugly end in the early 20th century with two World Wars, we started a gradual trajectory of decline. Slowly but surely, we have emerged on the losing side of an ever-widening international trade divide.

So how do we achieve growth? Growth above all else comes from growing companies, irrespective of their size. And companies grow primarily in one or two ways:

  1. By devising new products and services.  Companies that create new products and services that either don’t yet exist or produce better, faster, or smarter value alternatives to incumbents can achieve great growth.  Silicon Valley is a classic example of an eco-system that has become the breeding ground for technology companies to time and again disrupt existing industries by making better results for less money.
  2. By selling into new markets.  80 per cent of world growth comes from developing countries, and yet not long ago, we did more trade with Ireland than Brazil, Russia, India and China put together.  If British enterprises start moving out of their comfort zone and look beyond Europe to this increasingly rich emerging market places, the rewards can be significant. Just look at some of the spectacular results from the sales of European luxury brands in Asian markets.

If all of that seems too far-fetched for UK PLC, then look to a similar U-turn in UK sport for inspiration. In 1996, Britain won a single gold medal and came 36th in the ranking.  In the 2012 London Olympics we ranked third in the medals table. This dramatic turn was not accidental, but the result of thinking strategically rather than wishfully. Team GB relentlessly focused its relatively limited resources during the last two decades on transforming sports where Britain had shown competitive advantage to put British athletes on the podium. If we can do this in sports, then we can do it in UK enterprise. British PLC can win again.

Ali Parsa, Founder of Babylon and Circle

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