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. 

Here are some statistics that might put it into perspective how far behind the frontier the UK is.

• By GDP per capita, adjusted for purchasing power, the US ($76,399) is 39% richer than the UK ($54,603). GDP growth since 2010 has been 47% faster – nine percentage points – in the United States (28% growth) than the UK (19% growth), despite being from a much higher level.

• By productivity, or how much we produce per hour worked, the US was 38% more productive than the UK (UK $54.3/hour, USA $73.7/hour) in 2019. France / Germany were much closer to the US than to the UK at $69/hour.

• Between 2010 and 2019, productivity growth was twice as fast in the US (8% growth) as the UK (4% growth).

• Americans could stop working each year on September 27th and they’d still be richer than Britons working for the whole year. 

• Or, as Mike Bird pointed out, a car wash manager at an Alabama Buc-ees, a chain of gas stations and grocery stores, earns more ($125k/year) than THREE median UK salaries.

• The average starting salary for a newly-qualified nurse in the US is over £42,000, compared to only £27,000 in most of England, and the gap only widens as their careers progress.

• UK real disposable incomes are not forecast to return to 2021 levels until 2027.

And many input costs are higher in Britain than Ame