[Substitute *species* below and add *creativity*.....] [ The diffusion of technical knowledge can indeed benefit all those who receive it, without taking anything away from those who communicate it. This is indeed its most 'revolutonary' characteristic. It is reasonable to expect that it is also bound to be revolutionary in the methods of research it requires...At the very basis of traditional economics as is well known, there is the notion of scarcity of material goods; a notion that no longer makes sense with regards to knowledge...It is *knowledge* that is not confined to those limits; knowledge can can go anywhere and be aquired everywhere. It is therefore at the stage of the transmission and diffusion and aquisition of knowledge that the relations among nations must find their focal point. Those nations that remain behind have to speed up their processes of social *learning*. It is of no use to rely on the increases of productivity which take place abroad, since the associated benefits do not spill over the borders; they are intrinsically bound to remain where they have taken place...It is knowledge that has to be captured. It is the aquisition of knowledge that eventually makes the wealth of a nation." Luigi Pasinetti]
Brown's plan to foil eastern challenge Larry Elliott in Washington Monday October 4, 2004 The Guardian Britain faces an unprecedented challenge from the dynamic low-cost economies of China and India and must respond by becoming a highly skilled modern economy rather than by slashing wages, Gordon Brown said yesterday. The chancellor said coping with "a profound set of economic changes unparalleled in our economic history" would be the theme of his pre-budget report (PBR) this autumn. Mr Brown returned to the domestic agenda with a five-point programme for what may be the last budget before a general election after a weekend spent trying to secure backing for his plan to provide deeper debt relief and more aid to poor countries. Amid concerns that both manufacturing and service sector jobs are being outsourced to Asia, Mr Brown said Britain needed the "strength" to take long-term decisions necessary to meet the new global challenges. "Rapid technological change, new means of communication, lower transport costs and integrated markets and the rise of developing countries are combining to pose new and greater challenges over the next decade and beyond. "In the face of this new global market in labour, capital and goods, those that succeed will be the skilled, the flexible, the enterprising and the creative. That is why in this autumn's pre-budget report we will identify the long-term challenges over the next decade and tackle the obstacles that hold us as a country back." Mr Brown said that although wages in China and India were only 5% of those in Britain, the way to compete was through raising skills. "So the PBR will set out the next stage of our long-term policies for equipping the British people with the skills they need to compete in the 21st century." The G7 industrial nations held an informal dinner with the Chinese delegation at this weekend's IMF meetings, but Mr Brown said there was no immediate plan for the fast-growing economy to become a full member of the club. Beijing firmly resisted pressure from the US for an exchange rate revaluation - a move that would make Chinese exports dearer - but the chancellor said the dialogue had been "useful, open, informal and friendly". In addition to skills, Mr Brown said the PBR would also contain measures to boost enterprise, raise productivity and make the economy more flexible. "Facing long-term global challenges, this is no time for consolidation." A third theme, he told the IMF, would be providing more support for children, with an expansion of children centres and financial help for less well-off teenagers to encourage them to stay on at school. The chancellor stressed, however, that voters could expect no pre-election giveaways, while the government would be stepping up the pressure for modernisation and reform in the public sector. Responding to critics who say that he is in danger of breaching his own fiscal rules, Mr Brown said: "We are meeting and will meet our fiscal rules in this [economic] cycle and next as we uphold our prudent management of the public finances. "We will take no risks with inflationary pay deals and will reject irresponsible pre-election promises."
