ANDY HALDANEThought Leader: Economics
Thought Leader: Economics
Big Innovation Centre THOUGHT LEADER: ECONOMICS
Chief Economist, Bank of England
For the Scale-Up Party on March 10th 2015, Andy Haldane's thought leadership reflexion:
On rethinking the economy
"You don’t need an economist to tell you that innovation is important, but as I’m here that’s what I’m going to do. Since 1850, living standards in this country have risen roughly tenfold which means that every forty, fifty years, living standards are doubling, which is remarkable. How much of that is innovation responsible for? And the answer is more than half. In other words, in the absence of innovation, living standards today would be roughly where they were in the 1960s. This is a wholly different world we are living in, which I think underscores the work of the Big Innovation Centre under Will and Birgitte’s leadership.
Why do we need the Centre at all? Does history not tell us that growth and innovation takes care of itself? I think if that was your conclusion you could not be more wrong. Because out there the biggest macro-economic issue in town is where is growth to come from? Have we lost the keys to innovation? Are we suffering this thing that some people have called circular stagnation? And that jars with the notion that we're on the cusp of a new industrial revolution, a fourth industrial revolution, a digital revolution. The fruits of that revolution will only be harvested if we change fundamentally the infrastructure for innovation in this country. Sparky ideas are not enough. We need a means of scaling up those sparky ideas into businesses, hence the Scale-Up Party.
We do need a rethinking, maybe a remaking of the corporate governance model in this country – the sort of rethinking and remaking that the Big Innovation Centre is starting and which I’m happy to be part of. We need a financial system that is capable of delivering patient capital – capital that isn’t seeking short-term returns, the sort of thing that the Centre’s Entrepreneurial Finance Hub is seeking to create. If history tells us anything, it is that the raw ingredients of growth involve those three things and more besides, and that underscores for me the importance of the Centre’s work."