For Norman Tebbit the best strategy for unemployed Brits was to “get on your bike”. There is plenty of evidence to suggest that the cantankerous Tory’s exaltation of two wheels is even more applicable to Britain’s economic woes today.
A recent report carried out by the LSE has revealed the economic and environmental benefits of bikes. For instance, in 2010 the cycling industry (including manufacturing, cycle and accessory retail, and employment) contributed £2.9 billion to the British economy. Regular cycling also helps British businesses to grow. Drawing on empirical research into the relationship between cycling and absenteeism, the LSE authors estimate the UK’s frequent cyclists (who are less likely to pull a sickie) could be saving the British economy £193m in absentee costs. Plus, when the government has recently had to fend off threats of fines from the European commission over air pollution in London, cycling’s carbon neutral status is a useful asset.
Crucially, there is the potential to derive more profit from cycling. In 2006 cycle traffic per person was only marginally higher than the average in the 1970s, the nadir of cycling as a form of transport. Not only is there scope to merely increase the volume of cyclists but also an increase in take up could be achieved with minimal cost, a major boon in the current economic climate. Cycling only consumes 1% of the UK’s transport budget and merely doubling this could be expected to produce significant changes. Indeed, a government report on the return of investment of cycling concluded, “All of the studies in the UK and beyond report economic benefits of walking and cycling interventions which are highly significant … for UK interventions, the average figure is higher at 19:1.” ‘Normalization’ schemes such as preferential traffic signals and cycle only zones would help to persuade the large micro-segment of hesitant riders to cycle frequently.
Shifting to the perspective of long term economic strategy Team GB/Sky’s cycling setup provides some useful lessons for policy makers. British track cycling has gone from a desultory zero medals at Atlanta 96 to the dominant force in the sport with a haul of 12 medals (including 8 golds) at the Beijing Olympics in 2008. Given the success of Team Sky and Mark Cavendish on the road, the reasons behind the team’s turnaround merit some consideration. For David Brailsford, the current director of Team GB, the success now enjoyed by British riders stems from the reforms put in to place by his successor, Peter Keen, after the “Waterloo” of Atlanta. Keen, armed with an influx of national lottery funds, put in to place a structure that nurtures young talent from junior to Olympic level and created a culture where knowledge and technology (the track team uses military lasers during training) are valued.
There is reason to believe that this triumvirate of the two wheelers – investment, education, and innovation – is applicable to national economic policy. With the rise of China (the country now produces 12% of the world’s graduates and 5 times more engineers than the US every year) and other markets, competitiveness in the knowledge economy is at an all time high. Yet, this situation could be improved by an increased investment in education. Jan Muehlfeit, chairman of Microsoft Europe, points to the success story of South Korea. After a national education drive and subsequent upskilling the country was rewarded with increased exports of cars and televisions. The single European research arena planned for 2014 also bodes well for innovation. In particular, the zeal of Maire Geoghegan-Quinn, the European Commissioner for research, innovation, and science will help to get the project running quickly.
There are of course some problems with an economic policy focused on higher education and technological innovation. Significantly, the IMF has warned governments that focusing too much on creating hi-tech centres along the lines of Silicon Valley can result in a “hollowing out of jobs”. However, in light of Team Sky’s success, it is surely worth bearing in mind their approach, even if Vince Cable may go “nuclear”.