LSE Works: Centre for Economic Performance

Where is Future Growth Going to Come From?

Date: Thursday 17 February
Time: 18:30 - 20.00
Venue: Hong Kong Theatre, ground floor, LSE Clement House, Aldwych
Map and directions
Slides and downloads

Speaker: Professor John Van Reenen, Director, Centre for Economic Performance, LSE
Respondant: Professor Jonathan Haskel, Imperial College Business School
Chair: Professor Stephen Machin, Director of Research & Labour Markets Programme, Centre for Economic Performance, LSE

Overview: Where will the sources of new growth come from in the wake of the financial crisis and recession? What is the role of education, labour markets and government policy in supporting this growth?

The UK economy has been through the worst recession since the 1930s and more pain is set to come as the government’s austerity programme bites. With the economy contracting at the end of last year and Pfizer shutting down its main UK research lab (which created Viagra), the Chancellor is looking for the economic equivalent of Pfizer’s little blue pill to boost the UK economy – a ‘Plan V’.

That is the view of Professor John Van Reenen, director of the Centre for Economic Performance. In a public lecture at the LSE today, he will argue that we need both a Plan B as an alternative to the current austerity drive and a Plan V for long-term growth. Drawing on the latest research, he will show what UK policy-makers need to do to reboot and rebalance growth.

Innovation and management are at the heart of the UK’s longstanding productivity gap with other advanced countries. Although the UK is second only to the United States in science, our commercialisation of new ideas is poor. The UK also has a large number of badly managed firms, dragging down our performance. But as Professor Van Reenen will show, innovation and management quality can be boosted by smart reforms that increase competition and reform taxes.
He will also argue that current consensus forecasts are too pessimistic about the productive potential of the economy, just as they were too optimistic in the pre-crisis years. Too rapid spending cuts are damaging economic potential through premature scrapping of human capital and fixed capital and this will make excessive pessimism a self-fulfilling prophecy.

The government’s current fiscal consolidation plans need a change of direction. But just as important are microeconomic policies, such as immigration rules, which are undermining one of the UK’s engines of future growth – higher education.
From the mid-1990s, there were real improvements in UK productivity based on enhancing education and competition. Bridging the remaining productivity gap requires creativity and there is plenty that can be done to change policies on planning, higher education, business and skills to achieve this goal.

Slides, podcasts and videos

Download Van Reenen Slides (PDF)

Listen to Podcast (mp3) - 40MB, approx 88 minutes long

Download Video - approx 88 minutes long, may take a few minutes to download

John Van Reenen has been professor of economics at LSE and the director of the Centre for Economic Performance, since October 2003.

Jonathan Haskel is a Professor of Economics at Imperial College Business School based in the Healthcare Management and Innovation and Enterprise Group.

LSE Works is a new series of public lectures, sponsored by SAGE publications, that will showcase some of the latest research by LSE's Research Centres. In each
session, LSE academics will present key research findings, demonstrating where appropriate the implications of their studies for public policy. A list of all the LSE Works lectures can be viewed online.

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This event has been certified for CPD purposes by the Continuing Professional Development Certification Service. It is the responsibility of delegates to register their details with a LSE event steward at the event in order to obtain a CPD certificate of attendance. If a delegate fails to register their details at the event, it will not prove possible to issue a certificate. Certificates of attendance will be emailed out within 10 working days of the event.