68  That is more than counter-balanced, however, by productivity performance in the lower tail. This tail appears to be both materially longer and lower than the UK’s main international competitors (Chart 8). Moreover, this lower tail has lengthened by more over the past decade than in those countries. 69  The already slower rates  of technological diffusion in the UK, by international standards, have slowed further over the recent past. These diffusion dynamics are important to productivity and living standards. The wider dispersion and longer lower tail of companies helps explain the UK’s roughly 30% productivity gap with, say, France and Germany. And the widening dispersion in productivity performance between the upper and lower tails of companies helps explain the UK’s relatively poorer productivity performance than these countries over the past decade. These diffusion dynamics are also consistent, or at least are not inconsistent, with the dawning of a Fourth Industrial Revolution. This will have had the effect of shifting outward the technology and productivity frontier for pioneer firms. There is clear evidence of that having happening. Productivity among firms in the top 1% of the distribution grew, on average, by 8% per year over the ten years to 2014. The most-productive 0.1% of firms exhibited 12% annual growth. 70  As a point of comparison, the lower 99% tail of firms have experienced annual average productivity growth of less than 1% over the same period.
It may be relatively easy to discuss the transition plans with counterparties that are also financial institutions, as everyone is more or less on the same page. But IBORs are also used by banks’ different clients, both corporations and individuals. There is a big gap among these IBOR users on the awareness of the benchmark reform, so the situation becomes less straightforward. 12. Therefore, client education is another vital task. Banks should begin outreach to their clients, and educate them about the benchmark transition early. This could help to minimise misunderstanding and costly litigation in the future. Raising market awareness in Hong Kong 13. Closer to home in Hong Kong, the Treasury Markets Association (TMA) has been working with bank representatives on benchmark reform for many years. More recently it has intensified its reach-out to other sectors. It has set up a Working Group to engage a wider spectrum of stakeholders including accountants, lawyers, bank customers and industry 2/4  BIS central bankers' speeches  associations like ISDA. It is important that different market participants understand what the transition will mean for their business operations and how they should prepare for these changes. The Working Group is now looking at issues like the implications on accounting and the transition of cash products. It will further engage stakeholders to explore means of encouraging the adoption of alternative reference rates in their day-to-day transactions and business activities. 14. At the same time, the HKMA supervisors has also been actively engaging banks.