We know that because labour’s share of the national income pie is similar today to 1750. th  Of course, it is not ideas and innovation from the 18 century that has sustained growth over the subsequent period. Although the innovation process is continuous, historians often point to three distinct waves – three th  Industrial Revolutions. The second came in the latter part of the 19 century with the emergence of GPTs  11 12 13  For example, Romer (1990) describes a theoretical model of growth based around innovation. Bresnahan and Trajtenberg (1995). For example, Mokyr (2011) discusses Britain during the Industrial Revolution. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  such as electricity, the internal combustion engine and sanitation. The third came in the middle of the th  20 century with new GPTs such as computing, digitisation and the internet. 14  Yet in each case the playbook was familiar from the first Industrial Revolution. The emergence of a new strain of GPTs resulted in an outward shift in the production possibility frontier and capital-deepening. With higher levels of investment in physical and human capital, the productivity of companies, the wages of workers and the living standards of societies continued their Northerly ascent. The Golden Era continued. Some people are now discussing the next innovation wave, a so-called Fourth Industrial Revolution. The GPTs driving this are likely to include Artificial Intelligence (AI), Big Data, automation, robotics, 3D-printing and nano-technology.
Each year, they engage in between 6,000-8,000 projects, large and small, with companies. The Fraunhofer have been found to play a vital role as both innovation hubs and diffusion spokes, boosting productivity in the German economy. 76  Since they first become operational in 2011, the UK now has around 10 Catapult centres, modelled on the German Fraunhofer. These are smaller in number and scale than their German counterparts and have far less project experience. Their focus, to date, has primarily been on acting as innovation hubs rather than diffusion spokes. This means the UK does not currently have the diffusion infrastructure for its companies enjoyed by Germany. This is not unimportant in explaining its longer lower tail of firms. The UK’s university network, repurposed, could potentially provide that diffusion infrastructure. Conclusion The story of growth is a story with two “i”s – ideas and institutions. The Fourth Industrial Revolution will expand the range of ideas, perhaps more than any of its predecessors. It may also expand the range of  75 76  https://www.fraunhofer.de/en/about-fraunhofer/profile-structure/facts-and-figures.html Comin, Trumbull and Yang (2011). 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  workers who suffer its side-effects, perhaps more so than any of its predecessors. In the past, new institutions have emerged to cushion this painful transition, limiting the recessionary hit to societies. Historically, doing so appears to have held the key to sustainable growth.