It is also well-known, including from historical experience, that productivity depends importantly on a number of structural features of the economy, including levels of education and skills in the workforce, the quality and quantity of infrastructure and innovation and the scale of financing to companies. Price and financial stability are necessary conditions for rising productivity. But they are far from being sufficient ones. When it comes to those structural features of the economy, central banks do not have the tools to affect lasting change. Central bank tools are cyclical, rather than structural, because their impact on the economy is temporary, not permanent. We do not build schools, colleges, houses, roads, railways or banks. Nor do we finance them. Those tools, rightly, are in the hands either of governments or private companies. So too is the financing of them. Through their role in securing stability in prices and the financial system, central banks do have a clear interest in understanding the forces shaping productivity and the supply-side of the economy. Central banks can also help in diagnosing productivity problems and in identifying policies that could lift barriers to productivity improvement. That is the purpose of this lecture. It is also the reason several Bank colleagues have given recent speeches on this topic. 51  Before turning to that, let me say something about monetary policy. The job of securing price stability falls to the Bank of England’s Monetary Policy Committee (MPC), of which I am a member.
4.1  Innovative and diversified Swiss international trade  Looking at the structure of Switzerland’s international trade will allow me to dispel some wellestablished preconceptions about the Swiss economy. If I asked you to list some core Swiss economic sectors, you would probably mention banks, watches and chocolate. But Switzerland is much more than that. The Swiss economy is in fact highly diversified. For example, the share in total value added of the sector comprising financial, insurance and  BIS central bankers’ speeches  3  business services is smaller than the EU average (20.3% vs 26.2% in 2012, according to OECD figures). By contrast, the share of the manufacturing sector is significantly larger. Overall, the amount of goods and services that Switzerland sells abroad is equivalent to half of its Gross Domestic Product (GDP). Goods dominate export activity but, with a share of one-third, the contribution of services is by no means negligible. The export intensity is significantly above the OECD average. Switzerland is surpassed by the Benelux countries, however. Part of the gap with the Benelux reflects the extensive re-exports of imported goods generated by the activity of the world-class ports in Belgium and the Netherlands. Admittedly, access to the sea is not a key comparative advantage of Switzerland… In order to maintain competitiveness, the Swiss export sector has gone through profound structural changes during the last decades. First, there has been a shift in the composition of the export sector (figure 4).