The Gordonian Knot

Robert Gordon’s gloomy hypothesis of perpetually slow economic growth looks credible at first glance, but on closer examination it is full of holes. Much of the decline in productivity post-global financial crisis (GFC) has been due to earlier financial excesses and unavoidable secular demographic trends. The pace of technological advancement has not slowed and much of the productive potential of even ‘mature’ high-tech developments have yet to impact the economy at full-scale. So rather than fret over the end of productivity and growth, we would continue to focus on those countries best-placed to capitalise on the ongoing technological revolution. That favours developed markets, starting with the US, then Europe and Japan as well as those EMs that have critical mass in high-tech manufacturing sectors and are can resist the onshoring that digitisation will engender.

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