This year’s Nobel Laureates in economics’ warning that growth cannot be taken for granted must urge the UK to act, writes Ben Ramanauskas

Economic growth. Most people understand that it’s important and our politicians are eager to convince us that they can deliver it. But how can we actually achieve sustained economic growth? This year’s Nobel Laureates in economics have shown that sustained economic growth is not inevitable. This should serve as a wake-up call for UK policy makers.

The Prize was awarded to Joel Mokyr, Philippe Aghion and Peter Howitt for, in the words of the Nobel Committee, “having explained innovation-driven economic growth”.

Mokyr did this by demonstrating that you need borth huge breakthroughs and incremental change in order to drive growth. He goes on to demonstrate that for innovation to occur, you need a theoretical understanding of how the world works coupled with having the know-how and the ability to actually make things. According to Mokyr, for most of human history there was a disconnect between the two.

That is until the Industrial Revolution. He points out that there was a ‘Republic of Letters’ in Europe during this period. Very creative and intelligent people could correspond with each other and challenge and refine their ideas. Britain was uniquely placed given its culture, institutions and the large proportion of highly skilled people........

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