Change Concepts

Figure 2: Cost of Information Technology

Figure 2: Cost of Information Technology

In Figure 2 we see how since 1946 the real price of the basic element of the information technology (IT) revolution – the bit – has been driven down at a phenomenal rate – a factor of 10,000 in forty years.

It is the tremendous effect of these and other technological advances which determine a society’s strength and security.  Services – the latest quick fix for Britain’s problems – play at best a peripheral real part.  They show very little productivity gain and where superficially they do, it usually depends on a manufactured product.  Thus I have estimated that most if not all of the much vaunted surplus on City financial services in recent years is practically wiped out by the deficit generated by the financial world on two classes of manufactured import – IT goods (computers, terminals, printers) and prefabricated building products – a deficit of £1.5 billion on one current City project alone (Canary Wharf).

The real point though is that tangible goods are overwhelmingly the vehicle for brains – it is how brains are applied beneficially to the whole of society – via the enormous replicating power of modern manufacture.  In the material world, work on this process is the highest service that the talented can render their fellow men.

Figure 3: Decreasing Cost and Increasing Performance of Computers

Figure 3: Decreasing Cost and Increasing Performance of Computers

In the years since 1910 – the low point of our industrial fortunes – we have I believe registered considerable improvement – despite the leadership handicap I have cited.  And within the improving trend there have been outstanding successes: a chemical industry has been established and through the formation of Imperial Chemical Industries in 1926, a deliberate act for the purpose, established at world scale and maintained ever since at world rank.  Within the chemical industry the last decade has witnessed a quite spectacular success – in pharmaceuticals – where at one point three ofthe five best selling ethical drugs in the world were British and largely manufactured in British or British controlled plant.

During the six years of the Second World War, British Agriculture was transformed frm relative backwardness to one of the most labour and capital efficient in the whole world – with an agricultural machinery industry established as a byproduct.  This was brought about by a national act of will, by the expertise of our farmers, by mechanisation and by chemistry – applied most obviously via nitrates made from the synthetic ammonia I have referred to.

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