57  (c) Supporting Human Capital Ideas percolate through people. The UK’s labour market currently operates in a way which does not support the trickledown of knowledge as much as it might. If talent only circulates around existing productivity pools, an important diffusion channel is being blocked. Rather than smoothing out differences, worker movements appear to strengthen the magnetic pull of the productivity poles, the upper tail North and the lower tail South. The question is whether that magnetic pull could be reversed, or at least reduced, by supporting skills and staff transfers between the two poles. One way of doing so is through company mentoring or twinning. In effect, this is doing for companies what is often already being done for their staff, matching companies with very different levels of skills and experience. Be the Business is already engaged in a sequence of pilot mentoring schemes between companies, enabling the sharing of skills and knowledge. This is about to become a nationwide mentoring programme. They are also developing programmes to develop management and technical skills within companies – “mini-MBAs” – to help close some of the skills gaps with other countries. Beyond that, it may be worth considering whether a formal network for knowledge-exchange, along the lines of the German Steinbeis system, is worth considering. This would provide a more formal, systematic, institutional means of enabling skills transfer between companies, sectors and regions. This, too, would support diffusion and productivity growth in the long tail. Conclusion  57  Haldane (2018).
Chart 18 plots the distribution of management skills from the survey in the UK, Germany and the United States. The UK distribution has a notably larger lower tail. The UK has around twice as many companies with a  36 37  For example, Davis and Haltiwanger (2014) and Bjelland et al (2011). Bloom and van Reenen (2007), Haldane (2017). 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  management score below 2 than in Germany and the US, consistent with the UK’s longer tail being sourced, at least in part, in weaker management skills. Recent research by Bank colleagues, Saleem Bahaj, Angus Foulis, and Gabor Pinter, suggests this tail may also be explained by skills in corporate board rooms. Using company account data, they are able to assess the degree of “connectivity” of board members to other companies. This connectivity proxies a company’s ability, through its board, to draw on the experience of other companies when learning about and adopting new practices, products and processes. Chart 19 and Table 2 plots this measure of board connectivity across UK companies. It exhibits the same “power-law” distribution as other measures of connectivity, with a small set of companies whose directors are hyper-connected and a large set of firms whose directors are loosely or unconnected. 38  As with Facebook  friends and Twitter followers, there is a very small “in-crowd” of well-connected companies and a large disconnected “out-crowd”.