That divergence in levels of productivity has, in turn, translated into divergence in levels of GDP per head across countries over the same period. 66  The process of livings standards catch-up has stalled, possibly reversed. And the reason for that appears to be a slowing in rates of technological diffusion. If there has been a slowing in rates of technological diffusion across countries, is the same potentially true within countries? Evidence using micro-level company data within countries suggests it is. Research by the  63  Comin and Mestieri (2013a). Comin and Mestieri (2013b). Baddeley (2006). 66 Comin and Mestieri (2013b). 64 65  18  All speeches are available online at www.bankofengland.co.uk/speeches  18  OECD suggests there has been a slowing in rates of technological diffusion across firms in a number of countries. 67  Put differently, there is a long and lengthening lower tail of companies failing to keep pace with  the technologies used in frontier companies. Their productivity performance has fallen ever-further behind. This widening dispersion in the performance of upper and lower tail companies appears to be a particularly acute in the UK. To a greater extent than elsewhere, it appears that the UK is a tale (or tail) of two companies. At the upper end, the UK seems to have as many high-productivity companies as its main competitors (Chart 8). That fits with the UK’s standing as a global innovation hub, with world-leading companies and universities and high indices of innovation by international standards.

For decades, the primary focus of these institutions has been on providing young people with cognitive skills. That model has worked well in meeting the needs of the skill-shifts seen through each of the three industrial revolutions. 59  Carney (2016). PM speech on science and modern Industrial Strategy, available here: https://www.gov.uk/government/speeches/pm-speech-onscience-and-modern-industrial-strategy-21-may-2018 61 For example: https://vanguardcommunications.net/doctor-online-review-study/ 60  16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Whether that model will meet the needs of the Fourth Industrial Revolution seems more questionable, for two reasons. First, in future it seems very likely young and old alike will be in equal educational need – to train, retrain and retrain again through their 60 or 70-year careers. Second, the skills these people require for the future world of work will no longer be cognitive. Rather, they are likely to be more evenly balanced between the cognitive, technical and social - head, hands and heart. It has become rather trite to talk of the need for “life-long learning”. But never has the need for such learning likely to have been greater given the longer span and greater volatility in future career paths. Making these career transitions will itself call for a particular set of skills – personal resilience, problem-solving and flexibility. As is now well-recognised, these character attributes are best instilled in early years. If we now turn to our existing universities and colleges, at present these do not appear to be ideally sited to meeting either of these secular shifts in educational and training need.