Competitiveness

Abstract

The last 40 years have, arguably, seen no economic event more remarkable than the rise – out of the ashes of the Second World War – of Japan, Germany and France and the parallel decline of the economies of the UK and the USA. In 1950, of the 16 countries whose gross domestic product (GDP) per capita are shown in Table 1.1, the UK was one of the richest. Compared to the UK, the per capita GDP of Japan, in 1950, was approximately one-quarter, Germany’s was less than two-thirds and that of France was less than three quarters. By 1987, Japan, Germany and France all had a GDP per capita (respectively 6,9 and 3 per cent) higher than that of the UK. Indeed, by that date, with the exception of Italy,¹ Belgium and Austria, the UK was the poorest of the 16 countries shown. Although the USA maintained its position as the richest country in the world, the gap between it and its competitors had narrowed considerably: in 1950, Japan’s GDP per capita was only 17 per cent of the USA’s, but by 1987, it was almost 72 per cent of the USA’s per capita GDP.