3, pp. 391-410. Bahaj, S, Foulis, A and Pinter, G (2017), ‘Home values and firm behaviour’, Bank of England Staff Working Paper, No. 679. Baldwin, R (2016), The Great Convergence: Information Technology and the New Globalization, Harvard University Press. Bank of England (2016), ‘Understanding and measuring finance for productive investment’, Bank of England Discussion Paper, April 2016. Batten, S and Jacobs, D (2017), ‘Foreign-owned firms and productivity’, Bank Underground, 17 August 2017. Belsham, T and Rattan, A (2017), ‘Corporate Bond Purchase Scheme: design, operation and impact, Bank of England Quarterly Bulletin, Vol. 57, No. 3, pp. 170-181. Berlingieri, G, Blanchenay, P and Criscuolo, C (2017), ‘The Great Divergence(s)’, OECD Science, Technology and Innovation Policy Papers, No. 39, May 2017. Bjelland, M, Fallick, B, Haltiwanger, J and McEntarfer, E (2011), ‘Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data’, Journal of Business & Economic Statistics, Vol. 29, No. 4. Bloom N and van Reenen, J (2007), ‘Why Do Management Practices Differ Across Firms and Countries?’, Journal of Economic Perspectives, Vol. 24, No. 1, pp. 203-224. 24  All speeches are available online at www.bankofengland.co.uk/speeches  24  Brennan, S, Haldane, A and Madouros, V (2010), ‘The Contribution of the Financial Sector: Miracle or Mirage?’, in Turner, A et al, The Future of Finance: The LSE Report, London School of Economics and Political Science. Brynjolfsson, E and McAfee, A (2014), The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, W. W. Norton & Company.

17  The UK is, in many respects, a prime example of that secular struggle in practice. The forces of secular innovation and secular stagnation are both operating powerfully, with the two productivity poles acting like magnets pulling in opposite directions. This is widening the distribution of productivity across firms and, as a by-product, contributing to a widening of the distribution of pay across workers. The tail of two companies has, as its mirror-image, a tail of two workers. Another perspective on these productivity dynamics is provided by viewing them through the lens of technological diffusion. In the fullness of time, innovation should be expected to diffuse through the economy, lifting all boats. That has been the lesson of every industrial revolution. Yet in the UK, this technological trickle-down, from frontier to tail, appears to have dried up. A lengthening flotilla of boats has remained in dry dock. The diffusion engine appears, for them, to have seized up. 18  15  Defined as the share of firms with annualised productivity growth of less than ½% between 2004 and 2014. Schneider (2018). For example, Gordon (2012) and Brynjolfsson and McAfee (2014). 18 To a lesser extent, there is some evidence of the same being true internationally (Berlingieri et al (2017)). 16 17  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Empirical evidence, using international innovation indices, supports this diagnosis. Despite ranking th  19  consistently in the top-5 for innovation, the UK ranks only 38 globally for knowledge diffusion.