UK "soft" exports grow at same rate as China's "hard" exports

Source: Financial Times (UK).

Britain has got the knowledge and should flaunt it by Will Hutton.

China's export miracle over the past 10 years is now a commonplace. Less well-known is a parallel British miracle. Exports of knowledge-based service - everything from investment banking to publishing - have grown over the same period at near-Chinese proportions as part of Britain's emergence as a world leader in the knowledge economy.
It is a fragile position, not widely understood, with far-reaching implications. On data from the Organisation for Economic Co-operation and Development, Britain employed more than 48 per cent of its workforce in knowledge economy sectors in 2005 (including information and communications technology, health, education, financial and business services, creative industries and high-tech manufacturing) compared with a European Union average of 41 per cent. Britain's trade surplus in the knowledge industries constitutes 3.4 per cent of gross domestic product - the highest in the world.
Why is Britain doing so well? The Work Foundation's answer (we are engaging in Europe's largest-ever knowledge economy inquiry) is that the knowledge economy is a sophisticated supply response to high and growing levels of educated, discerning demand - and that Britain has enjoyed 15 years' growth of just such demand.
Abraham Maslow, the US psychologist, depicted human beings as having a hierarchy of needs ranging from the most basic to an apex of self-fulfilment. Enough consumers are now rich enough to have created a tipping point: the emergence of "apex consumption". Buyers, whether individuals or businesses, are insistent that what they buy is not just a transaction; they want value, a relationship, a quality experience and even psychological satisfaction from what they spend. Business success now requires investment not just in physical assets, but in design, so-called soft skills, brands, company-specific software, leadership, research and development and in-house training. In 1970, investment in these so-called intangibles was a mere 40 per cent of investment in tangible assets: now it is 125 per cent.
More at ft.com.