5 - The expansion of British multinational companies: testing for managerial failure

Summary

The accumulated evidence on the relative decline of the late Victorian and interwar British economy is overwhelming. Whether measured in terms of Britain's international competitiveness, growth of GNP or relative ranking in terms of income per head, the nation which had dominated the world economy mid century was relegated by 1914 to simply one among equals, sharing industrial leadership with America and Germany. Since the late 1960s, little of the historiography on the 1870–1914 period has been untouched by the search for the causes of Britain's poor economic performance. In its modern form, the case for economic failure was popularised by Derek Aldcroft (1964), who argued that Britain's third generation industrialists failed as innovators of new technology and methods, as proponents of technical education, as investors in research and development and as vigorous salesmen abroad. Considerable qualitative evidence, much of it comparative data on American and German practice, was presented to show that individual entrepreneurs and industries failed in each of these areas. But the qualitative evidence was vulnerable to the criticism that it was selective and unrepresentative of the whole economy. Every example of failure had a counter-example of innovating industries and entrepreneurs who adopted the latest techniques, employed scientists and skilled labour and were successful international competitors.