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This section features media releases and announcements from the Programme on Innovation and Diffusion.


Project Syndicate:
The Keys to Inclusive Growth

25 November 2021

The COVID-19 pandemic has highlighted major weaknesses of both the US and European models of capitalism. In the United States, the crisis has shown the limits of an economic system that fails to protect individuals against the effects of creative destruction and the social consequences of a macroeconomic shock.

Read more at Project Syndicate


LSE Business Review:
COVID-19 spurred a wave of new technology adoption by UK businesses

22 November 2021

The pandemic spurred three-quarters of firms to adopt new technologies, and businesses are keen to continue with this innovation mindset, which could be harnessed to fulfil the UK’s net zero commitments. Anna Valero, Capucine Riom and Juliana Oliveira Cunha find that the innovation response was stronger among larger and more digitised firms, potentially creating a lasting impact on the UK’s digital divide.

Read more at LSE Business Review


The Economist:
Britain’s economy does not lack oomph, but productivity is lagging

20 November 2021

Other measures of dynamism are looking up, too. Joint research from the Centre for Economic Performance and the Resolution Foundation, two think-tanks, analyses the Decision Maker Panel, a survey of British companies. It suggests that financial officers expect the reallocation of workers from shrinking to growing companies (a measure of dynamism) to speed up in the coming year. A different business survey found that by July this year over 60% of companies had engaged in product innovation and nearly 70% had adopted new management practices. Since productivity increases when people and stuff are used more effectively, all this bodes well.

Read more at The Economist


Telegraph.co.uk:
I don't like Mondays-or Fridays: City workers decide three days a week in the office is enough

19 November 2021

John Van Reenen, a professor at the London School of Economics who studies productivity, agrees. "Of course there are things like brainstorming, having meetings and meeting clients that are better done in the office, but many people also spend lots of time during their day doing things like answering emails and that it is just as efficient to do from home," Van Reenen says.

Read more at Telegraph.co.uk


Computing – MIT Technology Review:
An uber-optimistic view of the future

17 November 2021

After all, the origins of the technologies we’re so impressed by these days, such as synthetic biology and 3D printing, date back decades. The pipeline needs constant refreshing. John Van Reenen , an economist at the London School of Economics and MIT, and his col...

Read more at Computing - MIT Technology Review


Doorbraak.be:
Concerns about Glasgow

13 November 2021

Firstly, we must realise that the development of green technologies benefits from an economic environment that stimulates innovation in general. For example, economists Nicholas Bloom, John Van Reenen and Heidi Williams point out that the government can encourage innovation by the private sector by tax-favourable treatment of business investment in innovation, and by awarding grants and prizes for development by the private sector.

Read more at LSE Business Review


LSE Business Review:
How new technology can help clinical quality, productivity, and the healthcare workforce

10 November 2021

Health information and communication technology (HICT) holds enormous potential to improve productivity. Several countries, the UK and the US included, have embraced this idea and spent billions of dollars on promoting HICT adoption. Ari Bronsoler, Joe Doyle, and John Van Reenen reviewed 975 papers in the medical and economics literatures about HICT and found that on average there are major positive effects on patient outcomes and healthcare productivity.

Read more at LSE Business Review


The Atlantic:
America Needs a New Scientific Revolution

05 November 2021

Since 1970, the number of years the average Ph.D. student in the biosciences spends in graduate school has grown from a little more than five years to almost eight years. Producing experts is taking longer, and those experts are getting less productive. In the famous paper “Are Ideas Getting Harder to Find?,” the Stanford University economist Nicholas Bloom and his colleagues found that research productivity has declined sharply across the board since the 1970s.

Read more at The Atlantic


POID Press Release:
Wages of the typical UK employee have become decoupled from productivity

03 November 2021

POID research finds self-employed have suffered even worse wage growth than other workers.

Read the press release here


Research Professional News:
Budget failed to join the dots on key challenges

03 November 2021

Chancellor missed a chance to link innovation, net zero and levelling up, says Anna Valero. Chancellor Rishi Sunak’s autumn budget painted an upbeat view of the economy. Improved forecasts have left the Treasury with more money than expected. The decision to spend rather than cut taxes should help to repair public services that were under strain even before the pandemic.

Read more at Research Professional News


Telegraph India:
More hot air: stock market surge

02 November 2021

Using data collected from 8,000 big daily moves across 19 national stock markets, a 2021 NBER working paper by the Stanford and Chicago economists, Scott Baker, Nicholas Bloom, Steven Davis and Marco Sammon, shows that this Indian bull run may, indeed, be an outcome of international spillover of market irrationality.

Read more at Telegraph India


CBI:
CBI@10am - Analysing the Chancellor's budget

28 October 2021

Dr Anna Valero joined Rain Newton-Smith and Yael Selfin to dicsuss the Autumn budget and give an overview of key announcements.

Listen to the episode at CBI


MIT Technology Review:
An uber-optimistic view of the future

27 October 2021

John Van Reenen, an economist at the London School of Economics and MIT, and his collaborators have shown that research productivity itself is slowing as “new ideas get harder to find.” At the same time, the US and many other Western governments have decreased their support for R&D as a proportion of GDP over the last few decades; in the mid-1960s, US federal R&D funding relative to GDP was three times what it is today. The US doesn’t have to return to such high levels, he says, “but standing still is not an option.” That would, says Van Reenen, cause TFP growth and economic progress to stagnate.

Read more at MIT Technology Review


Project Syndicate:
The G20's Vaccine Imperative

27 October 2021

The world's richest countries are sitting on a vaccine stockpile of unused doses that are surplus to their requirements, whereas only 5% of Africa's population has been fully vaccinated. World leaders gathering in Rome for the G20 this month must address this catastrophic market and moral failure. This commentary is signed by: Philippe Aghion Professor of Economics, Collège de France & LSE.

Read more at Project Syndicate


UK Today News:
Winner takes all investing

26 October 2021

John Van Reenen’s paper “Increasing Differences Between Firms: Market Power and the Macro-Economy” does an exceptional job of making the empirical case for Arthur’s point. He points out that there has been a notable increase in the concentration of almost all US industries, in terms of share of sales and employment at the top firms, over the past few decades. Here for example is his chart of shares of sales and employment of the top four (“CR4”) and top 20 (“CR20”) companies in industries in the services sector.

Read more at UK Today News


HBS Working Knowledge:
What Companies Want Most in a CEO: A Good Listener

26 October 2021

Financial expertise and operational experience will only take executives so far. More than ever, companies want senior leaders with strong social skills and emotional intelligence, says research by Raffaella Sadun and Joseph Fuller.

Read more at HBS Working Knowledge


Financial Times:
Winner takes all investing

25 October 2021

John Van Reenen’s paper “Increasing Differences Between Firms: Market Power and the Macro-Economy” does an exceptional job of making the empirical case for Arthur’s point. He points out that there has been a notable increase in the concentration of almost all US industries, in terms of share of sales and employment at the top firms, over the past few decades. Here for example is his chart of shares of sales and employment of the top four (“CR4”) and top 20 (“CR20”) companies in industries in the services sector.

Read more at Financial Times


ICAEW:
Carbon Crunch: “Net zero will be a major driver of economic change”

25 October 2021

In advance of the government’s recently published ‘Net Zero Strategy’, the Resolution Foundation and the Centre for Economic Performance at the London School of Economics (LSE) published ‘The Carbon Crunch’, a report exploring the economic policy questions arising from the need for the UK to shift to a net zero economy.

Read more at ICAEW


VoxEU:
ECB monetary policy and catch-up inflation

14 October 2021

Moving to a 2% symmetric target does not feel like a big enough change to shift inflation expectations, which is ultimately what the ECB is trying to do. Introducing an average inflation target would be a bit more ambitious and would signal the desire for meaningful change.” In a similar vein, John Van Reenen (London School of Economics) argues that the “EC...

Read more at VoxEU


Buzzsprout Blog:
Emissions: Impossible? What does a Net Zero economy really look like?

10 October 2021

Dr Anna Valero - ESRC innovation fellow at London School of Economics - is a guest on 'Emissions: Impossible?' a podcast showcasing some of the most ground-breaking research and innovation in climate change, to reveal where the UK's strengths lie.

Read more at Buzzsprout Blog


De Tijd:
Are superstar companies causing inflation after the pandemic?

2 October 2021

The disruption of the production chains is taking longer than expected, but that does not change the inflation picture, central bankers stated this week during the annual Sintra conference. Does the danger come from superstar companies deepening the digital divide with competitors during the pandemic?

Read more at De Tijd


Yahoo! UK:
Energy costs to remain high even after petrol crisis ends due to Net Zero

30 September 2021

Experts have warned that energy is likely to be a major drag on household finances for years to come even after the current and heating crunch eases. Transitioning the UK to ‘Net Zero’ - where the emits net zero - will cost British on average £1,500 over the next decade, the Resolution Foundation and the London School of Economics have said. Britain ha...

Read more at Yahoo! UK


City A.M.:
Middle-income Brits to be hit for green homes

30 September 2021

Poorer households are the most likely to live in energy inefficient homes, compared to being the least likely in 2014, meaning they will have to cough up a relatively larger sum than wealthier Brits to green their homes, the Foundation found in a joint report with the London School of Economics. The government’s fis...

Read more at City A.M.


BusinessNewsWales:
The Opportunity for Software & IT Services SMEs to Compete in the Post-covid Environment

29 September 2021

SMEs addressing specific sectoral challenges, which may have previously been deemed non-critical, are now viewed as attractive solutions to improve margins and productivity. A survey of UK businesses conducted by the Centre for Economic Performance (CEP) and the Confederation of British Industry (CBI) found that that more than 60% of firms have adopted new digital technologies (such as remote working technologies or cloud computing) or new management practices since the start of the pandemic, and nearly 40% have invested in new digital capabilities (such as e-commerce or advanced analytics)

Read more at BusinessNewsWales


LSE Business Review:
How do internal communication flows change when a new CEO is appointed?

27 September 2021

CEO turnovers are significant organisational events that typically mark a discontinuity in firm strategy and operations. These likely changes are visible in internal communication flows. Stephen Michael Impink, Andrea Prat, and Raffaella Sadun study these flows in a novel way: they explore the evolution of internal communications metadata on emails and meetings for 102 firms that experienced a CEO change.

Read more at LSE Business Review


Wharton Research Data Services:
Wharton Research Data Services (WRDS) best paper awarded to John Van Reenen

27 September 2021

A Wharton Research Data Services (WRDS) best paper award has been given to John Van Reenen, director of the Programme on Innovation and Diffusion (POID), and his co-authors Sabrina T. Howell, of New York University, Jason Rathje, of the United States Air Force, and Jun Wong, of New York University, for their research into how the US Air Force improved innovation.

Read more at Wharton Research Data Services


The Economist:
Wave goodbye to the handshake

24 September 2021

Now Jose Maria Barrero, Nick Bloom and Steven Davis, three economists, find that 19th-century mores are back. As part of a long-running survey of American business practices they find the handshake is out, especially among women: 62% now prefer a verbal greeting, up from less than 30% before covid-19.

Read more at The Economist


The Irish Times:
Global economy needs Marshall Plan for Covid, climate change – economist

14 September 2021

The global economy needs a new Marshall Plan to fight the fallout from Covid-19 and place green technology at the centre of energy, transport and food production systems, according to economist John Van Reenen.

Read more at The Irish Times


Market Place:
For the economy, 9/11 was "the first ripple in a series of uncertainty shocks"

10 September 2021

It's that uncertainty Nick Bloom and Brock Blomberg are talking about. The not-knowing for businesses and governments and us. And 20 years of that

Read more at Market Place


The Edge Markets:
My Say: Economic growth and a societal merdeka of our spirit

9 September 2021

In a recent book, The Power of Creative Destruction, French economist Philippe Aghion and his two co-authors make the point that while it is common to see lower-income countries transitioning towards becoming middle-income countries, the next step in the transition is far too rare. An International Monetary Fund paper in 2019 makes the point that between 1960 and 2014, only 16 out of 182 economies globally reached high-income status. This is, as the term is commonly known, the so-called middle-income trap.

Read more at The Edge Markets


The Guardian:
As the UK economy bounces back, do we sceptics need to say we got it wrong?

1 September 2021

Mandatory reading in this context is the UK's decisive decade report, the UK Economy 2030 project launched jointly by the LSE's Centre for Economic Performance and the Resolution Foundation. Britain has to invest hugely and cleverly this decade to level up and achieve net zero, it argues, but it has the ball and chain around its economy of Brexit and low productivity.

Read more at The Guardian


The Daily Telepgraph:
Don't bet British staff will replace migrants

31 August 2021

From the Migration Advisory Committee report in 2014, which found migration actually helped to boost job numbers in Britain, to the London School of Economics assessment published right before the Brexit referendum that found lower wages were more strongly linked to the financial crash than immigration, the argument that a migrant's job comes at the cost of a native workers' opportunity has proven a difficult one to stack up.

Read more at The Daily Telegraph


Japan Economic Foundation (Newspaper):
Digital Transformation and Innovation: the Impacts of Covid-19

31 August 2021

Moreover, a July 2020 survey for the United Kingdom suggests that many firms that adopted digital tools and processes during the pandemic expect to maintain these post-crisis ("The Business Response to COVID-19: the CEP-CBI survey on technology adoption" by Capucine Riom and Anna Valero, A CEP COVID-19 Analysis, Paper No. 9, Centre for Economic Performance, London, September 2020).

Read more at Japan Economic Foundation (Newspaper)


Forbes India:
Rethinking capitalism: The power of creative destruction

31 August 2021

In The Power of Creative Destruction, economists Philippe Aghion, Céline Antonin and Simon Bunel argue that abolishing capitalism is not the solution. Historically, a market economy has proved to be a formidable engine of prosperity, enabling societies to develop in ways that were unimaginable even two centuries ago. However, market forces cannot be given free rein. The state and civil society both have a role to play in guiding the forces of disruptive innovation that underpin growth.

Read more at Forbes India


Public event

European Association for Research in Industrial Economics (EARIE) 2021

27-28 August 2021

POID Director John Van Reenen chaired and presented in a plenary panel discussion on “the Role of the State in the Post COVID Economy” at the 2021 Annual European Association of Research in Industrial Economics (EARIE) conference on August 28th in Bergen, Norway. Star speakers included Philippe Aghion (LSE and College de France), Wendy Carlin (UCL), Betsey Stevenson (Michigan) and Monika Schnitzer (Munich). The presentations covered thinking of a new framework for economic policy, industrial policy, the “knife edged” nature of economic policies actually enacted, how economists could be more influential, the risks of an over-extended industrial policy, the complementarity between policies towards growth and equality and the need for a new Marshall Plan to help the world recover from COVID.

Read more at EARIE


Express Online:
Furlough scheme draws to an end from next week - Rishi Sunak’s changes explained

26 August 2021

A survey undertaken by the London School of Economics (LSE) recently showed around one in every 16 businesses across the UK state they are at risk of closure over the next three months.

Read more at Express Online


LSE British Politics and Policy Blog:
UK business confidence has increased – but the removal of furlough, possible new variants, and localised spikes in infections still pose risks

26 August 2021

The number of UK firms at risk of bankruptcy has more than halved in the last six months, while only 6% of all registered businesses say they are at risk – the lowest since September 2020. However, Peter Lambert, Apolline Marion, and John Van Reenen write that the removal of government support, possible new variants, and the ever-present risk of localised spikes in infections could make the rest of 2021 a quite volatile period.

Read more at LSE Blog


The Observer:
As the economy bounces back, do we sceptics need to say we got it wrong?

22 August 2021

Byline: Will Hutton. Mandatory reading in this context is the UK's decisive decade report, the UK Economy 2030 project launched jointly by the LSE's Centre for Economic Performance and the Resolution Foundation. Britain has to invest hugely and cleverly this decade to level up and achieve net zero, it argues, but it has the ball and chain around its economy of Brexit and low productivity.

Read more at The Observer


VoxEU:
Labour market reallocation in the wake of Covid-19

13 August 2021

Lena Anayi, Jose Maria Barrero, Nicholas Bloom, Philip Bunn, Steven Davis, Julia Leather, Brent Meyer, Myrto Oikonomou, Emil Mihaylov, Paul Mizen, Gregory Thwaites. The Covid-19 pandemic hit some firms and sectors especially hard. As economies bounce back, a key question is whether the recovery will re-employ all of the workers shed during the downturn, and whether they will go back to similar jobs.

Read more at VoxEU


Imphal Free Press:
How social sciences can help fight COVID-19 and build back better

9 August 2021

A recent report by the Centre for Economic Performance and Grantham Research Institute on climate change and Environment emphasizes the importance of involving business and communities in developing a strategy for inclusive and sustainable recovery. A "better "post-recovery world will undoubtedly also benefit from the well-documented contributions that social sciences make in areas such as improving the resilience of our democracies and financial systems, exposing and addressing social and economic inequalities and promoting good mental health and more sustainable ways of living.

Read more at Imphal Free Press


Financial Times:
Why do some inventions take so long to arrive?

6 August 2021

Other obstacles are more subtle. Researchers at the Opportunity Insights project have analysed the phenomenon of “lost Einsteins”: young people (often girls or those from ethnic minorities or low-income families) who were discouraged because they never had an inventor as a role model.

Read more at Financial Times


Reuters:
Respond, Recover, Rejuvenate: How technology will drive SMB recovery

30 July 2021

These companies comprised 99.3 percent of all U.K. businesses, according to the National Federation of Self Employed & Small Businesses. Worryingly, however, by January 2021 more than one in seven U.K. businesses faced “imminent closure,” according to the Centre for Economic Performance (CEP) and the Alliance for Full Employment (AFFE).

Read more at Reuters


VoxEU CEPR:
Let me work from home, or I will find another job

27 July 2021

Jose Maria Barrero, Nicholas Bloom, Steven Davis. Employers in the US are grappling with whether and how to bring employees back to the office or other place of work. Using survey-based evidence, this column finds that four in ten Americans who currently work from home at least one day a week would seek another job if employers require a full return to business premises, and most workers would look favourably on a new job that offers the same pay with the option to work from home two or three days a week. High rates of quits and job openings in recent months appear to partly reflect a re-sorting of workers based on the scope for remote working.

Read more at VoxEU


Investors' Chronicle:
The economy's long Covid

26 July 2021

Fortunately, though, we have some reasons for hope. One is that entrepreneurs tend to be over-optimistic which means new ones will start businesses even if older, debt-encumbered firms close. Stanford University's Nick Bloom and colleagues show that people working from home report that their productivity has risen slightly. MPC member Jonathan Haskel adds that working from home might increase potential output in another way - by enabling some of those outside the labour force because they are carers or disabled to take up work. And, he adds, investment in intellectual property has held up well during the pandemic. Given that it has big spillovers - one companies' knowledge benefits others - this too augurs well for future growth.

Read more at Investors' Chronicle


New York Times:
We Are Leaving ‘Lost Einsteins’ Behind

21 July 2021

In “Lost Einsteins: How exposure to innovation influences who becomes an inventor,” Alex Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova and John Van Reenen, economists at U.C.L.A., Harvard, the London School of Economics, the U.S. Treasury and M.I.T., argue: ‘Children at the top of their 3rd grade mathematics class are much more likely to become inventors, but only if they come from high-income families.

Read more at New York Times


FE News:
80% of managers in the UK have little to no training - Debunk the leadership myth and eliminate the ‘Accidental Manager’

19 July 2021

2017 research from the Centre for Economic Performance at the London School of Economics found that four out of five of employees who are promoted to managerial roles are not suitably equipped to cope with leading a team, and this problem was particularly prevalent in Great Britain, with the country scoring just 3.03 out of five for management best practice, behind the US (3.31), Japan (3.23), Germany (3.21) and Canada (3.14).

Read more at FE News


Parliament:
Treasury Committee - Jobs, Growth, and Productivity after Coronavirus

12 July 2021

On Monday afternoon, Dr Anna Valero, Senior Policy Fellow, at the Centre for Economic Performance (CEP), and Deputy Director of the Programme on Innovation and Diffusion (POID) gave evidence to the Treasury Committee for their inquiry on 'Jobs, Growth, and Productivity after Coronavirus'. They discussed the outlook for economic growth post-pandemic, the causes of the UK’s lower level of productivity compared to other advanced economies, the causes of the ‘productivity puzzle’ in advanced economies and the specific challenges faced by the UK, and how Government policy can boost growth.

Watch at ParliamentLive.TV


All Africa:
Nigeria: Shaping the Covid-19 Response - The Role of Social Science

08 July 2021

A recent article by the LSE Centre for Economic Performance and the Grantham Research Institute on Climate Change and the Environment suggests that the involvement of businesses and communities in the post-pandemic world will allow communities re-open in a manner that is beneficial for communities that have been ravaged by the virus.

Read more at All Africa


The Economist:
Covid-19 has persuaded Americans to leave city centres

07 July 2021

Nicholas Bloom of Stanford University and Arjun Ramani, a student at that university who will take up an internship at The Economist this summer, have now supplied some answers. They find the pandemic has persuaded Americans to move out of city centres. But they have not gone all that far.

Read more at The Economist


VoxEU:
Capitalism after Covid: Conversations with 21 Economists

16 June 2021

As with Bretton Woods and with the Beveridge Report during WWII, the crisis generated by the Covid pandemic creates an opportunity to rethink our economic system. This new book offers the thoughts of 21 top economists representing most of the different fields of economics on the key challenges the world faces after the Covid pandemic.

  • Raffaella Sadun: Management for the recovery: Promoting innovation and curbing the power of digital giants
  • Philippe Aghion: Is ‘cutthroat’ capitalism more innovative?
  • John Van Reenen: The Lost Einsteins

Read more at VoxEU


The Times:
Pandemic investment could lift output

02 June 2021

Another report by the London School of Economics found that companies have been innovating at a much faster pace than they would have done otherwise. In a survey of several hundred companies, it found that more than 60 per cent of businesses invested in digital technologies and new management practices between March and July last year. A total of 45 per cent said that they had introduced new products or services during the period and about 38 per cent had adopted new digital capabilities. Crucially, 90 per cent of companies that have innovated during the coronavirus outbreak said that the changes would persist into the future and about three quarters said that their innovations had boosted profitability.

Capucine Riom and Anna Valero, the report's authors, said: "The unique nature of the crisis has forced many firms to make rapid changes to their ways of working and to adopt new digital technologies or management practices considered to be productivity-enhancing in normal times. If such innovation persists, it could induce lasting impacts on business performance and productivity".

Read more at The Times


The Independent:
Almost three-quarters of a million businesses ‘at risk of failure over next three months', economists warn

04 May 2021

Warnings of widespread business failure comes in an analysis by the John Van Reenen and Peter Lambert, using the latest Business Insights and Impact survey.

Read more at the Independent


Public event

Going for growth

08 February 2021


On the 8th of February 2021, POID, along with the Centre for Economic Performance, held an online public event on how the UK and the wider world can return to sustainable growth following the COVID-19 pandemic.

Pulling together the lessons of 30 years of work on technology, management and productivity, John Van Reenen argued that innovation is the key to rekindling our economies.


Public event

Technology and the labour market

16 December 2020


On 16 December 2020, the Centre for Economic Performance held a panel event to mark the 10th anniversary of Sir Chris Pissarides Nobel Prize for Economics. In 2010, Chris was awarded the prize for Economics for his work with Peter A. Diamond and Dale Mortensen for their analysis of markets with theory of search frictions.

This December event, Technology and the labour market, focused on how advances in artificial intelligence, robotics, biotechnology and other areas are bound to have ever greater impacts on jobs and the labour market and asked, How will the employment prospects and wages of different types of workers be impacted by these developments? Are jobs going to disappear?


LSE press release

New LSE innovation research programme to help boost UK productivity

21 August 2020

Entrepreneur/Productivity Image from    https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/h-August-20/New-LSE-innovation-research-programme-to-help-boost-UK-productivity CC0 Public Domain.
CC0 Public Domain.

A new Programme on Innovation and Diffusion (POID) based at LSE and led by world-leading economist Professor John Van Reenen will be funded by £4m from the Economic and Social Research Council (ESRC), part of UK Research and Innovation (UKRI).

It is part of a £30m package of measures by the ESRC - its largest ever single investment - to help solve the UK's stagnating productivity, as well as boost wage growth and drive up living standards. This research, which will inform significant decisions by governments and business leaders, has become more pressing given the need to support economic recovery in the context of the COVID-19 pandemic.

POID is rooted in the argument that productivity growth rests ultimately upon two elements: innovation - ideas that are new to the world - and the diffusion of these ideas across the economy. ESRC is contributing £4m, while LSE is providing £1m. The programme will be led by Professor Van Reenen, OBE, who is Ronald Coase Chair in Economics at LSE, and an associate and former director of the Centre for Economic Performance.

He is renowned for his research on productivity, which looks into the causes and consequences of innovation for economic life, both in terms of 'soft' innovation such as changes in management practices and 'hard' technologies such as Information Technology and Artificial Intelligence.

His work shows how important innovation is for economic growth, what can be done to increase management quality and productivity, and how and why governments should support research and development.

Professor Van Reenen said: "For over a decade, Britain's economy has suffered from stagnating productivity and wages. We need to reignite innovation and diffusion to recover from this pandemic and the other headwinds beyond."

Professor Simon Hix, Pro-Director for Research at LSE, said: "We very much welcome the opportunity the ESRC has given LSE to apply cutting-edge research in the social sciences to help solve what is perhaps the UK's most difficult economic policy challenge of our times."

Separately from LSE's work, the ESRC investment also includes a new Productivity Institute based at the University of Manchester.

Science Minister Amanda Solloway said: "Improving productivity is central to driving forward our long-term economic recovery and ensuring that we level up wages and living standards across every part of the UK.

"The new Productivity Institute and LSE's innovative research will bring together the very best of our researchers, boosting our understanding of the different drivers of productivity and helping people and businesses earn more in every area of our economy."

ESRC's Executive Chair, Professor Jennifer Rubin, said: "The Institute at Manchester and the LSE research programme address what is arguably the UK's biggest economic challenge. This funding represents the largest economic and social research investment ever in the UK, befitting its enormous potential to improve lives for millions of people.

"The Institute and programme will address low productivity by traditional measures, but also go beyond these measures to explore wider issues, including variation across places and what can be done to improve productivity for the UK as a whole; the importance of delivering a low carbon economy; relationships between well-being, productivity and skills; and the need for new ways of measuring productivity in a changing economic, technological and environmental context.

"The aim is to ensure that advances in knowledge inform the significant decisions and interventions that policy makers, businesses and individuals must make to improve productivity, and to achieve the attendant improvements in wages and living conditions that doing so can drive."

These new investments align with ESRC's Delivery Plan, which names 'Transforming Productivity' within the Productivity, Prosperity and Growth priority area.

They also complement ESRC's existing investments in the Productivity Insights Network (PIN), the Enterprise Research Centre, the What Works Centre for Local Economic Growth, and the Productivity Outcomes of Workplace Practice, Engagement and Learning (PrOPEL) Hub, a multi-disciplinary hub at Strathclyde Business School.

Read the full Press Release