NORWICH, England (Reuters) – Economic growth from the next industrial revolution, driven by new technology, may be blunted by problems such as growing inequality, lack of investment and increased short-termism, the Bank of England’s chief economist said on Tuesday.
In a speech, Andy Haldane weighed up arguments for and against secular stagnation – the theory that developed economies will not return to pre-crisis levels of growth because of slowing technological progress and a chronic shortfall in demand. On the one hand, Haldane said rising adoption of digital technologies offered strong grounds for expecting that rapid economic growth would resume after the damage done by the global financial crisis.
And the last few hundred years have shown how huge shifts in innovation – the industrial revolution, mass production, and the digital era – have been the driving forces behind economic growth and prosperity. But Haldane said declining levels of research among companies, falling public investment and growing inequality could stymie the prospect of further technological innovation.
“They could jeopardise the promise of the fourth industrial revolution. Pessimists’ concerns would be warranted,” Haldane said in the speech to the University of East Anglia in Norwich, eastern England.