The Government claims that British industry is heading for a global renaissance. However, according to Robert Heller, the hard facts reveal a large gap between rhetoric and reality.
The Government's faith in the mounting prowess of British industry rests on two pillars of the Heseltine competitiveness drive: galvanising smaller flotillas into greater thrust and efficiency, and glorying in the country's supposedly exceptional collection of battleships, the world-class contenders. The fate of the little ships must be uncertain. But do the facts support the vision of British giants leading the world?
An answer lies in Fortune's 1995 list of the world's 500 greatest companies by sales. Among the 28 industrial sectors surveyed, Britain has no top 500 contenders in the largest, automotive: in all leading global sectors (autos plus oil, electronics and electrical equipment, telecommunications, chemicals and food), the UK numbers six heavyweights against 35 for the rest of Europe. Even this exaggerates British strength since two of the six are Anglo-Dutch.
In smaller sectors, Britain leads European rivals solely in drink and has parity only in pharmaceuticals, aerospace, post and allied services and building materials.
To put this in perspective, the total sales listed in automotive (with no British presence) are respectively nine and 15 times those of drink and pharmaceuticals. As for information technology, in computers and office equipment neither Britain nor any other European country has leaders to match the Americans and Japanese. Indeed, the numbers generally show Europe at a disadvantage. The five largest sectors contain 125 mega-companies, of which Europe has only a quarter. And Britain's small share of Europe's poor showing certainly doesn't support any Government claims of big-company prowess.
Although several world-class British companies rank below the top 500, like British Steel, GKN, Pilkington and Cadbury Schweppes, the manufacturing heights occupied by others are too large and lofty for comfort - unless you believe, as Thatcherites once did, that services are the wave of future prosperity and a source of British strength.
Alas, the disparity is even greater in the financial services, on which such lofty hopes are mostly pinned. Among the world's 59 largest banks by revenue, four are British, with 26 from other European countries. The Continent's two giant 'diversified financials' (ING and Suez) loom head and shoulders above any equivalents in the UK.
In insurance, against 14 rivals, Britain musters three, with the biggest, the Prudential, in 12th position, half the size of Germany's leading Allianz Group.
Savings institutions are dominated by Brits: but even here, the Abbey National and the Halifax are overwhelmingly domestic competitors. In global terms, 'the City' is no exception to the general loss of competitive power which inevitably developed over a long period of slow economic growth. That sluggishness inevitably hampered the birth and growth of entrepreneurial newcomers - but Britain's current standing in corporate powerhouses is not the result of a failure to generate new giants.
Veterans dominate the premier leagues of world competition. As Tony Jackson noted in the Financial Times, the 30 companies in the Dow Jones Industrial average over a century in age. Sixteen of the 30 even featured in the 1935 index. Measured by market value, seven of America's 10 largest date back to the 19th century. The rest of Europe is no different. Though Daimler-Benz has just reported Germany's record losses, you can safely bet on it still being around in 2096.
In contrast, Britain's giants have shown markedly less staying power.
Only six of the 30 companies in 1935's initial FT index still feature in today's. The reasons are partly but undoubtedly structural: as their Commonwealth strength withered away, UK companies fell back on a similar home market - smaller, softer and eventually insecure. But structural difficulties are not the only reason why companies like Dunlop vanished: fundamental strategic failure played its part too.
Global before its time (and beyond its management powers), Dunlop passed through classic phases of poor diversification and acquisition and innovatory lag in the base business, before losing its markets, independence and very existence. It lacked the organisational capability to rebound from its cyclical low points.
The steady build-up of this human, financial and business capability - which world-scale companies can easily afford - should be the ultimate bulwark of British companies against Dunlopism.
Organisational capability has buttressed American companies, in and out of crisis. They have have been able to call on greater depth and professionalism of management at all levels. However inept US managements have been strategically, they've continued over long periods to invest in the basic strengths of the brand, the technology and the business system.
Bearing that American contrast in mind, the danger in the UK Government's optimism lies in the assumption that a decisive corner has been rounded and that national champions are powering ahead to international triumph.
In truth, the race restarts all the time and Britain cannot claim to be in pole position.