The flipside of digital services is that more activities that were previously part of the market economy can now be produced at home. A person wanting to arrange a holiday, for example, no longer needs to visit or phone a travel agent, but can research and book the whole trip herself online. The sales of hotels and flights still contribute to GDP. But the work formerly done by the travel agent, which has now effectively been outsourced to the consumer, disappears. This also raises questions for how we measure productive activity. These examples highlight the difficulties of understanding how the economy is developing – let alone estimating its potential growth rate. To be sure, we should aim to rise to that challenge and update our statistics to capture such changes. But clearly, as policymakers, we also have to be humble about what can know. And in that context, imagining that we can reliably hold the output gap around zero is simply hubris. 2  See: Olivier Blanchard, Eugenio Cerutti and Lawrence Summers, Inflation and Activity – Two Explorations and their Monetary Policy Implications”, IMF Working Paper WP/15/230 (November 2015). 3  See: Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (W. W. Norton & Company, 2014), especially Chapter 8. 4  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/481452/ Bean_review__Interim_Report_web.pdf. 5  See Erik Brynjolfsson and Joo Hee Oh, “The Attention Economy: Measuring the Value of Free Digital Services on the Internet”, Thirty Third International Conference on Information Systems (Orlando: 2012).

12 There’s a lot of scope for European firms to catch-up in terms of improving management quality, to make the organisational changes required by new technologies, and in terms of improving ICT skills, so that workers can operate those technologies effectively. 13 But looking further ahead, it’s clear we need to reflect on what types of skills will be needed for the next phase of the ICT revolution: the replacement of routine service occupations by robotics. 14 There will obviously have to be larger human capital investment in people who will design robots. But greater upskilling and professional polyvalence will also be needed in the people who use them: those who work in automated warehouses, for example, may have to have  10  http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/01/13/090224b08405ea05/ 2_0/Rendered/PDF/World0developm0000digital0dividends.pdf. Similarly, Diane Coyle notes that the UK’s Statistical Abstract for 1871–85 – in retrospect, the height of the industrial revolution – devoted just 12 of the 200 pages on the economy’s output and trade to manufacturing and transport “Commentary: Modernising Economic Statistics: Why It Matters,” National Institute Economic Review, No. 234 (November 2015). 11  Robert J. Gordon, The Rise and Fall of American Growth (Princeton UP; 2016). See also: Juan F. Jimeno, Frank Smets and Jonathan Yiangou, “Secular stagnation: A view from the Eurozone,” Secular Stagnation: Facts, Causes and Cures, ed . Coen Teulings and Richard Baldwin (CEPR, 2014). 12  Bart van Ark, Mary O’Mahony and Marcel P. Timmer, “The Productivity Gap between Europe and the United States: Trends and Causes”, The Journal of Economic Perspectives, Vol.