Newspapers feast on plane crashes, but they yawn over poor engineering. The conflagration gets the front page, while those prior expert warnings over causes were lucky to make the bottom of page 46. You can see the same pattern in all the huffing and puffing over Pfizer's battle for AstraZeneca.

Here's the tale you have probably read over the past few days: a US drugs giant is eyeing up a UK rival – in what would be the biggest foreign takeover in British history. Trouble is, America's Pfizer has got form as a slash-and-burn merchant, snapping up big competitors, then axing staff numbers and research budgets. Were it to do the same with AstraZeneca, pop would go one of Britain's few big corporate spenders on R&D, one of our most important exporters and one of our best hopes of becoming a hi-tech knowledge economy.

The moral would appear to be clear: those Yankee Viagra merchants should keep their filthy, erection-enhancing hands off our British crown jewels. That, as both sets of pharmaceutical bosses are grilled by MPs on Tuesday morning is pretty much what you'll hear from a majority of the press and Ed Miliband's troops. And Vince Cable will do what Vince Cable usually does: drop hints that Cameron and Osborne are holding him back from stepping in, all the while looking about as happy as a labrador trapped in a hot car.

There's one thing wrong with this story: it neatly skips most of the important bits. Not that I think AstraZeneca should be handed over to a rival to be dismembered. But something has gone badly wrong in a country when one deal involving one Anglo-Swedish drugmaker – in which Britons make up fewer than one in six of all staff – assumes such significance to its future as a research-intensive innovation economy. Given all that has been said by Thatcher, Blair and Cameron, whole swaths of Britain ought by now to be covered with private-sector labs and factories, employing hundreds of thousands of people and exporting around the world.

The true significance of Pfizer's proposed bid is this: it highlights the paucity of options now available to Britain, and the decades of neglect and mismanagement that led us here. It is the plane crash that justifies all those expert warnings.

How did we get here? AstraZeneca was originally the corporate child of ICI, which was once Britain's largest manufacturer of everything from paints to betablockers. Then came one of Thatcher's favourite wheeler-dealers, Jim Hanson, who, in 1991, put in a bid to take over the conglomerate and break it up. That approach got bogged down in scandal – but ICI's executives did what Hanson wanted anyway and smashed up the company. The drugs arm was sold to the Swedes, the pesticides division flogged to the Swiss, the dyes part to the Dutch and the adhesives and electronics materials finally parcelled out to the Germans.

Much of this actually happened in the last few years, but the chances are that you won't remember the process – because no one kicked up a fuss at the time. Indeed, before the ICI name finally disappeared for good in 2008, the then chairman asked around Whitehall whether there was "any kind of policy on protecting British companies". As he told Alex Brummer for his book Britain for Sale, the usual Treasury answer came back: "Absolutely not. We're interested in jobs but we're not interested in who owns the company."

Except that being a distant outpost in a foreign corporate's empire usually means that you are first in line for cuts and back of the queue for jobs and research money. AstraZeneca is a good example: it has cut plant after plant in Britain – the Cambridge labs that are currently arousing such concern are only the rump of the drugmaker's research activity in this country.

The result of all this shrinkage is painful to see. At the end of last year, I went to Manchester to meet Andre Geim, one of the Nobel prize-winning pair who discovered graphene. Here was an apparent wonder material – the new plastic, experts claim – but Geim told me that no matter how many dinners and conferences he did, he could hardly get any British firms to do the necessary research. The great excitement in Manchester was over a new graphene research centre soon to open with about £60m of taxpayer funds; one scientist estimated that South Korea's Samsung was spending nearly five times that sum on investigating one application of the substance.

When Thatcher came to power, Britain was one of the most research-intensive economies in the advanced world; now we're among the least. According to a much-cited report published by Cambridge University, British business spends less on R&D compared with the size of our economy than the US, Germany, France, South Korea. Even the Chinese spend more.

This is a story about how Britain's economy got dumber, and it goes alongside one about how we got less industrious. A coffee chain doesn't need to spend money on R&D; a hi-tech manufacturer does. But the UK kissed goodbye to our manufacturing base long ago.

Boosters point out that we still have a large manufacturing sector; but that is merely a function of Britain still having one of the largest economies in the world. Do what Adam Leaver at Manchester University has done and compare how much value British manufacturers add relative to the size of the economy, and you'll find that we now rank 24th out of 31 of the most advanced nations, behind Slovenia and New Zealand.

What are we left with? Not the march of the makers, as Osborne would have it, but the march of the mergers and acquisitions advisers. The withering away of both our manufacturing and research capacity helps to explain why we can't get a proper recovery going – but rely instead on pumping up the old credit and property bubble. The fuss caused by the proposed AstraZeneca deal is deserved, but it comes too late.