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Investing for Prosperity: Skills, Infrastructure and Innovation

Author

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  • Timothy Besley
  • Miguel Coelho
  • John Van Reenen

Abstract

What policies and institutions are needed to sustain long-run growth in the UK? We describe an optimistic story of the UK economy over the past 30 years. From the late 1970s, the UK reversed a century of relative decline in terms of per capita GDP with our main counterparts in the US, France and Germany. A key factor behind this improvement was an array of policy changes including an expansion of higher education and greater competition in product and labour markets. However, major weaknesses with respect to long-run investment in human capital, infrastructure and innovation remain. These are hampered by problems of short-termism and policy risk. We propose a series of radical reforms to address these problems: such as more flexibility in schooling with a new focus on disadvantage; a new architecture for national infrastructure decisions and more competition in banking.

Suggested Citation

  • Timothy Besley & Miguel Coelho & John Van Reenen, 2013. "Investing for Prosperity: Skills, Infrastructure and Innovation," National Institute Economic Review, National Institute of Economic and Social Research, vol. 224(1), pages 1-13, May.
    • Handle: RePEc:sae:niesru:v:224:y:2013:i:1:p:r1-r13
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    Cited by:

    1. Besley, T. & Roland, I. & Van Reenen, J., 2019. "The Aggregate Consequences of Default Risk: Evidence from Firm-level Data," Cambridge Working Papers in Economics 2061, Faculty of Economics, University of Cambridge.
    2. Emmerling, Johannes & Groom, Ben & Wettingfeld, Tanja, 2017. "Discounting and the representative median agent," Economics Letters, Elsevier, vol. 161(C), pages 78-81.
    3. Stathoulopoulos, Kostas & Mateos-Garcia, Juan, 2017. "Mapping without a map: Exploring the UK business landscape using unsupervised learning," SocArXiv ryxdk, Center for Open Science.
    4. Max Nathan & Anna Rosso, 2014. "Mapping Information Economy Businesses with Big Data: Findings for the UK," CEP Occasional Papers 44, Centre for Economic Performance, LSE.
    5. Eduard Alvarez & Mario Holzner & Stefan Jestl & Jordi Marti-Henneberg, 2016. "Introducing Railway Time in the Balkans: Economic effects of railway construction in Southeast Europe and beyond since the early 19th century until present days," wiiw Balkan Observatory Working Papers 121, The Vienna Institute for International Economic Studies, wiiw.
    6. Nathan, Max & Rosso, Anna, 2015. "Mapping digital businesses with big data: Some early findings from the UK," Research Policy, Elsevier, vol. 44(9), pages 1714-1733.
    7. Jan De Loecker & Tim Obermeier & John Van Reenen, 2022. "Firms and Inequality," CEP Discussion Papers dp1838, Centre for Economic Performance, LSE.
    8. Meki, Muhammad, 2023. "Levelling the debt–equity playing field: Evidence from Belgium," European Economic Review, Elsevier, vol. 151(C).
    9. Nicholas Oulton, 2019. "The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 36, pages 110-141, Spring.
    10. d'Agostino, Giorgio & Scarlato, Margherita, 2016. "Institutions, Innovation and Economic Growth in European Countries," MPRA Paper 72427, University Library of Munich, Germany.
    11. Hector Espinoza & Stefan Speckesser, 2019. "A comparison of earnings related to higher level vocational/technical and academic education," CVER Research Papers 019, Centre for Vocational Education Research.
    12. FitzGerald, John & Znuderl, Nusa & CASE (Poland) & CPB (Netherlands) & DIW Berlin (Germany) & ETLA (Finland) & The Kiel Institute for the World Economy (Germany) & NIESR (United Kingdom) & OFCE (Franc, 2013. "Economic Assessment of the Euro Area: Winter 2012/13 Report," Research Series, Economic and Social Research Institute (ESRI), number SUSTAT47, June.
    13. Ghulam Mohey-ud-din & Khadija Ikram, 2023. "Is Economic Growth Inclusive in Punjab, Pakistan? A District Level Assessment Using the Composite Index (Article)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 62(2), pages 199-222.
    14. Brian Nolan, 2020. "The Median Versus Inequality-Adjusted GNI as Core Indicator of ‘Ordinary’ Household Living Standards in Rich Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(2), pages 569-585, July.
    15. Max Nathan & Emma Vandore, 2013. "Here Be Startups: Exploring a young digital cluster in Inner East London," SERC Discussion Papers 0146, Centre for Economic Performance, LSE.
    16. Nathan, Max & Vandore, Emma, 2013. "Here be startups: exploring a young digital cluster in inner East London," LSE Research Online Documents on Economics 58424, London School of Economics and Political Science, LSE Library.
    17. Hector Espinoza & Stefan Speckesser, 2019. "A Comparison of Earnings Related to Higher Level Vocational/Technical and Academic Education," National Institute of Economic and Social Research (NIESR) Discussion Papers 502, National Institute of Economic and Social Research.
    18. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation," OECD Economics Department Working Papers 1046, OECD Publishing.
    19. Steve Gibbons, 2015. "Planes, Trains and Automobiles: The Economic Impact of Transport Infrastructure," SERC Policy Papers 013, Centre for Economic Performance, LSE.
    20. Janika Saretzki & Jürgen Pretsch & Ekaterina Pretsch & Gerhard Grossmann, 2021. "Experience, Behavior, and Action in Crisis Situations: A Literature Review," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 8, September.
    21. Colin Turner, 2018. "The governance of polycentric national infrastructure systems: Evidence from the UK National Infrastructure Plan," Environment and Planning C, , vol. 36(3), pages 513-529, May.

    More about this item

    Keywords

    UK economy; investment; productivity; policy risk;
    All these keywords.

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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