In human history, progress is the exception – not the rule. In his DLD26 conversation with Max Flötotto (McKinsey), Oxford economist Carl Benedikt Frey dismantles the comforting belief that technology naturally delivers prosperity.
“We are experiencing a global productivity slump”, Frey notes. “And we have to ask ourselves why that is.”
Successful innovation requires two distinct phases, he explains: an “exploration phase” that thrives on decentralization and experimentation, and an “execution phase“ that relies on economies of scale. “Those are two very different phases”, Frey says. “You have different institutional arrangements supporting each of them.”
Historically, Europe “had the advantage of enabling exploration and permitting inventors to move from one country to another”, the economist points out. “Today, unfortunately, Europe doesn’t have the same levels of experimentation, nor does it have the level of market integration needed for scaling.”
Watch the video to explore the session in detail and find out why automation alone cannot deliver productivity growth.
