Why we should transition from a service economy to a time economy …

In 2018, the service industries accounted for 81% of total UK economic output and accounted for 84% of workforce jobs in September 2019.

While there might be a small shift back to manufacturing essential products post corona the power of China and India means it is impossible for the UK to return to our manufacturing heyday.

Jobs for life don’t exist like they used to, manufacturing offered people the opportunity to choose a career and progress within the same company and communities were built around factories.

For example, Ford Motors was synonymous with Dagenham, where it employed more than 40,000 workers by the 1950s. Even as late as 1991, 40% of workers in the borough were in manufacturing.

An article from 2018 in the Financial Times The decline of manufacturing, charted, Based on an International Monetary Fund (IMF) report, looking at the historical trend of manufacturing employment and its links to productivity and inequality. The report questions some assumptions about what has happened to global manufacturing in the last half-century, but it made 3 points very clear: 

  1. The UK industrial decline is real. 
  2. Too many new jobs are in low skill, low pay sectors. 
  3. Attacks on unions have left workers worse off

The pandemic is almost sure to affect the way people work, shop and socialise, perhaps permanently shifting the way many service industries operate. Consumers will think harder about the health implications of squeezing into crowded pubs, restaurants, theatres and cinemas. More businesses will accept the effectiveness of employees who work from home, and the move to online shopping will accelerate.

One of the UK’s top chef’s Marcus Wareing says restaurants are in ‘danger’ due to coronavirus “The minute you’ve got social distancing, two metre or even one metre, the maths just don’t stack up. There are some scary statistics, when you look at your business structure and you see what turnover you put in…our bank accounts are empty every month that goes by.”

Unfortunately, the show won’t go on for 41 venues in New York’s famous theatrical centre, Broadway. Is this an omen that a devastating blow will be dealt to The West End? Whatever the case the impact on the performing arts, globally, will be severe.

Tourism will take years to recover, however we are a service economy and will continue to be a service economy for the foreseeable future. Service industries in areas like Stratford-upon-Avon, Devon, Cornwall and the Lake District rely heavily on the tourist trade. Over £22 billion is set to be wiped from UK domestic tourism industry due to coronavirus and Sally Balcombe chief executive officer of VisitBritain says ‘Every time we do the modelling the figures get worse,’

The human effect will be catastrophic according to the World Health Organisation the economic crisis is expected to produce secondary mental health effects that may increase suicide and alcohol death rates.

However, the mental health effects of the economic crisis can be offset by social welfare and other policy measures. For example, active labour market programs aimed at helping people retain or regain jobs counteract the mental health effects of the economic crisis.

So the question is how do we make a service economy sustainable? We need to shift, where possible, to a time economy … an environment where all the transactions between business entities are in digital format, increasingly generated automatically and completed in real-time (as they occur) without store and forward processing.

The slowdown in Britain’s productivity growth, even before coronavirus came calling over the last decade is the worst since the start of the Industrial Revolution 250 years ago, holding back gains in living standards across the country.

So the simple way to protect our economy is to become more productive. As productivity is a measure of how much work is done in a given amount of time if you are more efficient with your time and the time of your customers you are more productive and therefore more profitable.

If you have more free time, you have more time to contribute to the economy. If we look at the journey of a pound, it starts at the bank of England and will either end up back there or in the coffers of wealthy businesses or people. So what we want to do is make that pound pass through more hands and households before it reaches its final destination. Essentially keeping “wealth” in local communities for longer.

41% of respondents to the Henley Centre survey mentioned time as their most valuable resource, while only 18% believed that money was most important. The suggestion made by the surveyors is that many of us are harassed for time, and that – as in a real economy – we might be prepared to trade off income in order to buy back more time. This idea is fundamental to a time economy.

A time economy is not just about saving time it is creating local economies where people can share their skills and expertise, like piano lessons or carpentry. It can really combat the loneliness epidemic and can help improve the health of communities.

There are many different ways that a time economy can work but the foundations of a successful time economy are … time, talent & technology.