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A Tale of Two Economies

Since the fall of the British Empire back in the 20th century, many have believed that the British are doomed to forever pine for the glory days. Yet while Britain may never be as powerful as it was in its heyday, there are signs that reports of its decline, to paraphrase Mark Twain, have been exaggerated. The BBC says that the UK leads the world with an “internet economy” worth more than £2,000 per person. Internet commerce in the UK outpaces healthcare, construction and education.

This may at first appear to be just an interesting factoid, but it is in fact extremely good news for the British. For centuries, one of Britain’s greatest strengths has been a culture that values innovation. The British have always been a nation of early adopters who seize on to new ideas and new technology faster than others (a tradition it exported to the other nations of the Anglosphere). This has allowed them to carry on and  thrive even as other neighbors struggle just to remain relevant. The progress of internet commerce in Britain suggests that the old fire hasn’t completely died down.

Meanwhile, on the other side of Europe, we can see what happens when other cultural forces are at work. The euro crisis highlighted the Greek state’s reputation for backward thinking and unfriendliness toward entrepreneurship, but the full extent of the problem is still emerging from the gloom. This New York Times story on one aspiring entrepreneur’s struggle to create an e-business for olive products reveals a society that is almost pathologically resistant to innovation. Amid the usual bureaucratic obstacles were some unfamiliar ones: stool samples, X-rays, and pages and pages of paperwork. And this was only the beginning:

E-commerce is still relatively new in Greece, though growing. But Internet businesses with international sales are so rare that when Mr. Antonopoulos sought help with processing payments, three different Greek banks seemed incapable of grasping the concept.

Before the banks would agree to act as clearinghouses for credit cards, they insisted that portions of the Olive Shop Web site — including the company’s marketing and privacy policies — be written exclusively in Greek, even though Mr. Antonopoulos tried to explain that his customers would not understand Greek. […]

The worst moment, he said, was when representatives from two agencies came to inspect the shop and disagreed about the legality of a circular staircase. They walked out telling him that he “would have to figure it out.”

“At that point, we actually thought about just going to the U.K. with this,” he said. “One of the inspectors knew about new legislation. The other didn’t. And they just refused to come up with a solution.”

The contrast could not be starker. The UK and Greece are both developed countries, and there is no reason that new technologies could not be harnessed equally well by entrepreneurs in both places. Yet Britain’s online industry is thriving, while Greece is doing everything it can to strangle e-commerce before it gets off the ground.

Britain may have lost some of its luster since the glory days, but its culture of innovation continues to serve it well. It may even be that waves of immigration (which many British hate, but which probably do them some good by breaking comfy old habits) will re-energize the UK and give it more of the dynamism and drive that once made it the dread and envy of the world.

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  • Lorenz Gude

    One of the ways the Internet is bringing the Anglosphere together is podcasting. Leo LaPort’s TWIT network audience is 30% from outside the US. All his podcasters know, for example, that in Australia to root one’s phone means to know it in the biblical sense. Listener questions arrive from around the Anglopshere with the occasional one from more exotic places like Scandinavia. British guests are common – often Internet entrepreneurs themselves. The upshot is that in the new media Americans are much less insular – more global in their outlook. As a long time expatriate I think this bodes well for the US and the UK and anyone else who wants to join in the fun of building the post Blue economy.

  • Jim.

    I wish the BBC had provided a little more detail about what sort of e-commerce it was engaging in. If Britain’s renowned and lucrative Financial industry were providing the bulk of that two thousand per capita, that might indicate a cap on its growth potential. It would also go a long way to explaining why Silicon Valley tech talk hasn’t given any indication of a British “invasion”.

    Good for the British, anyway, if they can keep up.

  • Toni

    I don’t get the impression that many Brits are yearning for the glory days of empire. But entrepreneurship is strongly rooted in Britain’s centuries of business and financial innovation.

    Who was it who called England “a nation of shopkeepers,” and meant it derisively? But of course that’s one its great strengths.

    Immigrants will participate in innovation only to the extent that immigrants and their families assimilate into British culture. Some do and some don’t; those who choose not to, and ghettoize themselves in welfare dependence, are one of Britain’s greatest challenges.

    As for Greece, many years ago I had a discussion with a friend who’d come here for an advanced computer degree, and stayed, and has a niche software company. That discussion centered on his claim that Americans needed to relax and enjoy life in the laid-back way Greeks did. I just kept asking, “Why are you here?” — meaning, where his software company could thrive.

    But he always brought his aging parents over here for medical treatment, and now I believe he’s brought his widowed mother over here for good, to escape the present turmoil of his native Greece.

    The point of my anecdote is that culture matters, and freedom to innovate unhampered by petty bureaucrats matters. Thank God that in the U.K. and U.S., economic freedom is deeply embedded in our cultural DNA.

  • Andrew Allison

    Fond as my feelings are for the country of my birth and education, I fear that the good professor is too generous. Tech history is rife with examples of technology invented in the UK and commercialized elsewhere. Radar, TV and computers being notable examples. More recently, while ARM is getting rich off licensing, the commercialization of the most power-efficient computer architecture developed to date occurred elsewhere.

  • Kris

    It’s almost ironic that I first came across the story covered by the NYT a month ago.

    Whenever buying anything on the web, I make sure to also check Amazon’s UK site. They sometimes have very interesting deals on DVDs. (Caveat: the accursed region encoding.)

  • Hubbub

    “It may even be that waves of immigration (which many British hate, but which probably do them some good by breaking comfy old habits) will re-energize the UK and give it more of the dynamism and drive that once made it the dread and envy of the world.”

    Or not.

  • Kris

    Hubbub@6: “Or not.”

    Rest assured: Via Meadia will be watching!

  • Eurydice

    It’s not that Greece is specifically or consciously against innovation – the reason behind this weirdness in Greece is that literally everybody who’s in a position to make decisions (and this includes bankers) is there for political reasons. Expertise in the job at hand is not a requirement, bringing in votes is. So you end up with bank managers who know nothing about running a bank, ministers of tourism who’ve got no clue about tourism, ministers of education who have no education themselves and embassy officials whose last job was “electrician.” And what makes everything even more chaotic (if that’s conceivable) is that half-finished plans, last-minute restructurings, constant cabinet reshuffles and a host of other desperate measures have left all the government offices unable to enact, enforce or effect anything.

    Still, there are several private companies in Greece which are going it alone and figuring out things for themselves, and the government is beginning to look to them for some guidance.

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