Category: General

The leading candidate to replace Keir Starmer as the UK’s next Prime Minister, Andy Burnham, gave a speech on Monday in which he laid out his proposed governing plan. There was a lot in the speech – lots of politics, some immediate priorities, but also a lot more policy than many commentators were expecting. This piece is not a systematic review of the speech, and I won’t touch on the proposals for institutional change, as exemplified by the announcement of No 10 North. Instead, here are some of my reflections prompted by a few key passages, focusing on my interests of innovation, universities, industrial strategy, and regional economic growth.

Bottom up growth:

“It is time for Whitehall to accept that growth cannot be ordered from the top down. Instead, it can only be nurtured from the bottom up … It comes from running sound finances as we have done here in Greater Manchester, which in turn gives businesses the stability and the confidence to invest, increasing their productivity and adoption of new technology. It comes from placing our universities at the heart of local economies, as all the mayors do, and bringing the innovation-lead approach through start-ups and scale-ups.”

This is the central statement of Burnham’s economic thinking – we need economic growth, growth comes from improvements in productivity, & productivity growth is achieved by businesses investing and adopting new technology, and new businesses starting up and scaling. The argument is that this is most effectively encouraged at the level of a place, archetypically a city-region like Greater Manchester.

Continue reading “Five glosses on Andy Burnham’s big speech”

For the first time for several decades, there are grounds for optimism about the future of Sheffield’s steel industry (very much reduced in scale though it now is). Sheffield Forgemasters (now UK state owned) is building a major new facility, and Special Melted Products (with an infusion of Taiwanese capital) is also expanding. This isn’t about the standard grades of steel for use in construction – the expansion is to meet demand for specialised forgings from speciality steels and other alloys, driven by applications in defense, aerospace, civil nuclear and energy, and influenced by a new focus on UK national resilience and industrial capacity. This gives me a pretext to republish this piece I wrote nearly ten years ago about the history of the steel industry in Sheffield – and the valuable lessons this history can teach us about innovation.

As someone interested in the history of innovation, I take great pleasure in seeing the many tangible reminders of the industrial revolution that are to be found where I live and work, in North Derbyshire and Sheffield. I get the impression that academics are sometimes a little snooty about local history, seeing it as the domain of amateurs and enthusiasts. If so, this would be a pity, because a deeper understanding of the histories of particular places could be helpful in providing some tests of, and illustrations for, the grand theories that are the currency of academics. I’ve recently read the late David Hey’s excellent “History of Sheffield”, and this prompted these reflections on what we can learn about the history of innovation from the example of this city, which became so famous for its steel industries. What can we learn from the rise (and fall) of steel in Sheffield?

The rock-climber Alex Honnold is in the news again, thanks to his live, televised ascent of a skyscraper in Taiwan.  This gives me an excuse to recycle this post from October 2019.  Here I explain that just because Honnold climbs without a rope, that doesn’t mean that his achievement doesn’t rely on technological progress over many decades, contrary to the claim of a well-known economist.

The rock climber Alex Honnold’s free, solo ascent of El Capitan is inspirational in many ways. For economist John Cochrane, watching the film of the ascent has prompted a blogpost: “What the success of rock climbing tells us about economic growth”. He concludes that “Free Solo is a great example of the expansion of ability, driven purely by advances in knowledge, untethered from machines.” As an amateur in both rock climbing and innovation theory, I can’t resist some comments of my own. I think it’s all a bit more complicated than Cochrane thinks. In particular his argument that Honnold’s success tells us that knowledge – and the widespread communication of knowledge – is more important than new technology in driving economic growth doesn’t really stand up.

The film “Free Solo” shows Honnold’s 2017 ascent of the 3000 ft cliff El Capitan, in the Yosemite Valley, California. The climb was done free (i.e. without the use of artificial aids like pegs to make progress), and solo – without ropes or any other aids to safety. How come, Cochrane asks, rock climbers have got so much better at climbing since El Cap’s first ascent in 1958, which took 47 days, done with “siege tactics” and every artificial aid available at the time? “There is essentially no technology involved. OK, Honnold wears modern climbing boots, which have very sticky rubber. But that’s about it. And reasonably sticky rubber has been around for a hundred years or so too.”

Hold on a moment here – no technology? I don’t think the history of climbing really bears this out. Even the exception that Cochrane allows, sticky rubber boots, is more complicated than he thinks. Continue reading “Rock climbing and the economics of innovation (revisited)”

As the UK endures the second decade of its crisis of economic stagnation, a loose group of commentators, activists and think-tanks have emerged to argue that this stagnation isn’t inevitable, and to call for more houses and infrastructure to be built, for energy to be cheaper and more abundant, and for a restoration of the technological optimism of earlier times.  It’s not an entirely homogenous movement – some call themselves “Anglofuturists”, others organise under the banners of “progress” and “abundance”.  As I wrote a year ago in my piece “Taking Anglofuturism seriously”, I am sympathetic to some of the goals of this movement. I agree that our economic stagnation isn’t inevitable and that the UK’s physical infrastructure needs upgrading, I regret the failure of recent new nuclear build plans, and I think that technological innovation is a key driver of productivity growth.  Yet to me there seems to be a gap in the movement between willing the ends and identifying the means, with the suggested remedy all too often coming down simply to calls to deregulate more and reform the planning laws.

There is perhaps a lesson from history here, emphasised by some comments the historian David Edgerton made in a podcast last week.  The kind of nation that Anglofuturists call for looks rather like what was delivered by post-war British governments between 1950 and 1980.  Then, the UK was one of the most R&D intensive economies in the world, with a cross-party consensus that technological innovation would deliver economic growth.  Despite persistent national soul-searching about a ruling-class trained in the humanities, a number of scientists and engineers rose to powerful and influential positions.  The world’s first nuclear power station was designed and built in just four years, following which there was a large-scale roll out of nuclear power stations. A national capability for launching satellites was developed (and subsequently abandoned).  This period saw the construction of most of our current motorway network, and, as my plot shows, new houses were built at a rate that has never since been matched.  In this sense there is a certain retro quality to Anglofuturism, a harking back to a time when the UK seemed to look to the future with technological self-confidence.

How will artificial intelligence change the world of manufacturing?  Sam Altman, CEO of OpenAI, has no doubt that the effect will be transformational [1]:

“If we have to make the first million humanoid robots the old-fashioned way, but then they can operate the entire supply chain—digging and refining minerals, driving trucks, running factories, etc.—to build more robots, which can build more chip fabrication facilities, data centers, etc, then the rate of progress will obviously be quite different.”

It’s difficult to know what to make of this vision.  Taking it at face value, it seems to represent a profoundly unimaginative view of the future, in which there is a straight replacement of workers in factories by humanoid robots.  Factory automation has developed hugely since my brief period as a production line worker in 1980, but this hasn’t occurred by a one-for-one replacement of people by robots.  

Most people have seen pictures of modern car factories, with robot arms carrying out repeated operations like welding with great precision.  But, as Tim Minshall explains in his excellent book on manufacturing [2], robots are just one example of the many devices that can carry out physical operations in an automated factory.  If you are automating a chemical factory, you don’t do it by getting a humanoid robot to open the valves and stir the tanks.  The most sophisticated factories that currently exist – the chip fabrication facilities that produce the GPUs that underpin AI, as well as the CPUs in our phones and computers – are almost entirely automated.  In the fab, a silicon wafer goes through hundreds of complex process steps without being handled by a human – but the robots that move the wafers from tool to tool run on wheels, not legs.

So is Altman just saying that automation makes capital goods cheaper, and that leads to a self-reinforcing process of increasing productivity? That’s certainly true, but it’s a process that is neither new, nor having much to do with large language models or generative AI.