It was these two “i”s that were responsible for taking us from yesteryear’s hunter-gatherer clans to today’s super-cities.17 Let me start with the first “i” – ideas. These have their source in another, by now familiar, i – imagination. Great leaps forward societally have always had innovation, ideas and imagination at their hub. While fire provided the spark for early homo sapiens, this was only the first in a sequence of technological fireworks. In the mid-18th century, the Industrial Revolution was sparked by the firing of three ideas – James Watt’s steam engine, Richard Arkwright’s water frame and James Hargreaves’ spinning jenny. These inventions occurred at almost exactly the same time (within a handful of years) and in almost exactly the same place (within a few hundred miles of latitudes North of Stockport). This was remarkable, if not coincidental. The second Industrial Revolution of the mid-19th century was sparked by a different set of innovations. This time it was sanitation, electrification and internal combustion that lit the fuse on the mass-industrialisation of countries and continents. The third Industrial Revolution of the mid-20th century brought a further wave of innovation, with digitisation, computing and the internet generating a transformation of business and society. Each of these inventions involved a creative leap of imagination. As adoption spread, each became in time a GPT, applicable across sectors, industries and geographies. Like fire, these GPTs then transformed industries, jobs and lifestyles in ways inconceivable to their creators.

One important piece of context is that, viewed over the long arc of history, humans have never had it so good. Stephen Pinker and Hans Rosling have recently brought home this crucial point in clear, statistical terms. Just consider the last two hundred years.16 Over that period, each generation has a bit less than 50% better off financially than its predecessor. You are almost 50% better-off than your parents and more than twice as well-off as your grandparents. Your living standards today are around 16 times higher than your Glaswegian ancestors in the mid-18th century and 11 times better-off than when the GSA was founded. That is mass financial flourishing by anyone’s reckoning. 12  Murphy (2018). http://www.firefighterfoundation.org.uk/history/ 14 Phelps (2013). 15 Gordon (2012). 16 Pinker (2018), Rosling (2018). 13  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  This flourishing was physiological as well as financial. Over the same period, rates of infant mortality have fallen 40 percentage points. Lifespans have doubled. Although the average age of the population has never been higher, their average remaining life has also never been longer. Levels of global poverty have fallen from over 90% to single figures today. Societal progress has become an entrenched social norm. What explains these great leaps forward in economies and societies? As with any reading of history, there is no universally-agreed account. My reading of economic and social history suggests the secret sauce of economic and social progress has two essential ingredients – ideas and institutions.