Britain is a developing country
Britain is a developing country
We aren't leading the world: we're trying to catch up
Since the 1970s, economic growth in the world’s most advanced economies – and indeed science itself – appears to have slowed down. These “frontier” economies are the canary in the coalmine, because they have, in theory, maxxed out how much they can grow by using existing inputs (like labour, land and capital) better. For them, unlike developing countries, all that’s left is to improve the inputs they’ve got via innovation. And that rate of improvement seems to have slowed down.
This “Great Stagnation”, as Tyler Cowen dubbed it in his 2011 book, has been the focus of much interest and concern. I have even made and presented a BBC radio documentary looking into it. (For what it’s worth, I think one problem is that we’ve made science more bureaucratic and deferential to authority.)
Last week, I spoke at Civic Future’s conference on the topic, focusing on how it related to the UK. When it came to the UK, I said I thought it was the wrong question.
A slowdown in “frontier growth” and technological progress matters a lot for the United States. But it matters less to Poland or Bangladesh – countries that are still trying to get to the frontier. While technological advances do still benefit them, most of their growth comes from using their existing inputs, like land and labour, in more efficient ways that are not technologically novel, or adding more capital that, again, is not technologically novel – some agrarian developing economies can grow simply by adding more tractors; no developed economy can.
For these developing countries, the challenge is to catch up with the world’s advanced economies, and they can still have rapid improvements in their living standards without the need for global technological progress at all.
My claim is that the UK is now a lot more like Poland than it is like the United States in terms of the kinds of growth it needs to do – driven by improved use of existing technology and inputs, and accumulation of capital, rather than driven primarily by technological advancement. With the exception of a few sectors like AI, we are so far behind the frontier in terms of economic development that worrying about technological progress doesn’t make much sense, and at worst is a serious distraction.
