30  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  During the first three Industrial Revolutions, the skills workers needed to keep one step ahead of the machine were largely cognitive. Machines undertook largely manual (“doing”) tasks, which had previously used labour-intensive technologies. Cognitive (“thinking”) tasks remained, by and large, the exclusive domain of humans. So institutions emerged to nurture thinking skills, largely in children and young adults, to increase the chances of successful transition to the cognitively-intensive future world of work. In children, the most important of these institutional innovations was probably compulsory schooling. For children between the ages of 5 and 10, this was formally introduced in the UK with the Elementary Education Act of 1880. It was extended to age 11 in 1893 and age 12 in 1899. The Fisher Act of 1918 provided for compulsory education to age 14 and part-time education to age 18. Compulsory full-time education was extended to age 15 in 1947 and age 16 in 1972. 33  As these pieces of social infrastructure developed, so too did standards of educational attainment and cognitive skills. The fraction of the population aged 15 and over that attended secondary school rose from 23% to 60% between 1950 and 2010. 34  In the 1950s, less than 11% of the relevant age group passed five  or more GCSE O levels in England and Wales. By 2010, that had reached almost 80%.
In this edition, to the very illustrious list of previous winners of the Germán Bernácer Prize, we add, with all due merit, Professor Nicholas Bloom, a British economist, who is today Professor in the Economics Department at Stanford University. Professor Bloom graduated in Economics from Cambridge University, obtained his masters at Oxford University and his Ph.D. at University College London. He has been awarded the 2010 Frisch Medal of the Econometric Society, is a Fellow of the American Academy of Arts and Sciences and an associate editor of, among other journals, Econometrica and the Quarterly Journal of Economics and Management Science. He has published many articles on economic and management issues in top journals, including the American Economic Review, Econometrica and the Quarterly Journal of Economics. Professor Bloom’s two main areas of research are macroeconomic uncertainty and firm organization and productivity. In the first area, his main contributions are to show that macroeconomic uncertainty increases substantially in the aftermath of significant shocks. He also shows that during these periods of uncertainty firm’s investment responds less to demand shocks. This set of contributions has promoted research that explores the importance of variations in volatility to explain macroeconomic fluctuations and the decisions of agents in the economy. In the second area, firm organization and productivity, he shows that social capital, represented by trust, increases aggregate productivity by affecting the organization of firms. He also shows the implications of these organization techniques on the implementation of Information and Telecommunication technologies across firms.