the thing that makes the thing-in-itself

on the oddness of British exports

The sectoral breakdown of the UK export statistics has one rather unique industry. It’s five times as big an export earner as automobiles, more than twice as big as financial services and about a fifth of our entire exports. And it’s an industry which almost nowhere else has; the same SITC is quite tiny in all the other G7 countries.

In other words, Britain is the Saudi Arabia of “Other business and professional services”. We dominate the world when it comes to “doing miscellaneous stuff”. Nobody can touch us when it comes to “things that don’t fit in any other category”.

What, actually, is this thing? As I joked above, for the most part it’s a statistical convenience. The categories for goods exports and imports are very detailed indeed, partly because they are checked at the customs and matched up to schedules of import duties and the like. Services imports don’t have anything like the same data collection infrastructure, because they might happen entirely over the phone or email, or they might come into the country via a bored-looking person in a crumpled suit saying “just for some meetings” when the immigration border guard notices they’ve ticked “business” on the landing card.

So while the numbers are collected separately for manufactured goods at a very high resolution, there is no practical use for distinguishing between a consultant in geophysical computation and a consultant in millennial social media branding. And so they are not distinguished, and we have this weird catch-all that basically describes “services exports which aren’t tourism or finance or anything else that’s easy to identify”.

A hell of a lot of it is lawyers; the British services sector is where you have to go to if you want to interact with the world’s single largest and most valuable intangible asset, which is called “The Commercial Common Law Of England And Wales”. Some of the rest is our exceptionally profitable higher education industry. But a lot of the rest is, literally “miscellaneous services”. Small consultancies, often built around one or two eperienced professionals who have had half a career in management roles in some other industry or in public service, and have then gone into business providing advice in a particular niche. Anything from the optimisation of a specific software package to the care of drainpipes in historic buildings.

This is the British Mittelstand, and I think any industrial strategy for the UK has to take into account the things that we’re actually good at, rather than what seems whizzy and cool. Germany has a massive hinterland of small manufacturing companies that, to use the slogan “make the thing that makes the thing inside the thing”. The UK has an equally significant hinterland of businesses based out of the Old Rectory somewhere, all based around someone who “knows the person who knows the answer to the question”. Looking at the noticeboard in my co-working space, I can see about a dozen faces of people who go to a lot of networking events and whose children only really understand they’re a “businessperson”.

One good reason to read a little bit of cybernetics (like, for example, to pre-order “The Unaccountability Machine: Why Big Systems Make Terrible Decisions And How The World Lost Its Mind”) is that it immunises you against the fallacy that these things are in some way “bullshit jobs”. They aren’t, any more than the cerebellum is a bullshit organ. Some of the Old Rectory Mittelstand is involved in maintaining specialist knowledge and understanding; some of it is involved in maintaining a web of social connections and communication links. All of it is involved in the extremely important activity which Stafford Beer called “translation and transduction”. That is to say, getting information to the place where it can be the basis for action, in a form in which it can be used to make decisions and in time to be any use.

What’s a more interesting question is why it is that in the UK these functions tend to be spun off into separate businesses, rather than appearing as part of the overhead of larger corporations. But this is an equivalent question to asking why it is that the German Mittelstand exists, rather than being part of the operations of vertically integrated manufacturers. It’s mainly a matter of how the statistics are created and where the dividing lines are placed between organisations rather than of the production process itself. That is to say, it’s management rather than economies.