On 15 October 2025, the University of Oxford’s Oxford Martin School hosted a book talk featuring Professor Carl Frey, Oxford Martin City Fellow and Director of the Programme on the Future of Work, alongside his role as Associate Professor of AI and Work at the Oxford Internet Institute and Senior Research Fellow at the Institute for New Economic Thinking. Drawing on his second book, How Progress Ends: Technology, Innovation, And The Fate Of Nations, Frey explored why technological and economic advances are far from inevitable—and what history can teach us about sustaining innovation.

Opening Remarks and Introduction

The lecture opened with an introduction to Professor Carl Frey, whose 2013 study, The Future of Employment: How Susceptible Are Jobs to Computerization, has garnered over 19,000 citations and influenced policymaking worldwide. The speaker also noted that his book, How Progress Ends, was shortlisted for the Financial Times and Schroders Best Business Book of the Year Award.

Questioning the Inevitability of Progress

Frey began by challenging the prevailing Silicon Valley narrative that progress simply “happens.” He asked why it took some 200,000 years to reach the Industrial Revolution, why not all societies today enjoy prosperity, and why advanced economies such as Britain have experienced stagnation in recent decades. His aim was to offer a conceptual framework that goes beyond geography or culture to explain both bursts of rapid growth and subsequent slowdowns.

Catch-Up Growth versus Frontier Innovation

He outlined three traditional explanations for wealth disparities—geography, culture, and institutions—and argued that none fully account for episodes of rapid advance followed by collapse, as in the Soviet Union. Catch-up growth, he explained, thrives under centralized mobilization of resources, but pushing beyond the frontier requires decentralization and experimentation.

Lessons from the Soviet Union and Postwar Planning

Frey contrasted the USSR’s success in mass-production catch-up—driven by top-down planning and even landmark achievements like Sputnik—with its failure to adopt computing at the frontier, where benchmarking and accountability break down. He compared this to the loosely coordinated but decentralized structure of ARPA, which empowered researchers like J.C.R. Licklider and laid the groundwork for the internet without a grand plan.

Japan’s Coordinated Capitalism and Digital Stagnation

Turning to postwar Japan, Frey described how the zaibatsu-turned-keiretsu system and ministry-led investment enabled rapid catch-up in automobiles and electronics, only for Japan to miss the hardware-to-software transition. He credited U.S. antitrust actions—such as the IBM suit and the AT&T breakup—for unbundling hardware and software and allowing new firms to flourish around emerging technologies like ARPANET.

The Chinese Model: Autonomy, Competition, and Recent Centralization

Frey then examined China’s provincial experiments in the early reform era, where local authorities competed to attract investment and fostered catch-up. He contrasted that with recent trends toward re-centralization under “common prosperity” campaigns, increased state stakes in tech firms, and the rise of politically connected SOEs—developments he warns may divert resources from genuine innovation and contribute to China’s productivity slowdown.

A Global Productivity Slowdown and AI’s Promise

Across advanced economies, Frey noted, productivity growth has decelerated since the mid-2000s, with Europe closely tracking the U.S. slowdown. He posed the critical question of whether AI can reverse this trend, arguing that its impact will depend on how firms deploy it and whether competitive entry is preserved. He cited benchmarks like the ARC AI challenge, where even leading models score below 15% on problems trivial for humans, as evidence that raw scale alone is insufficient.

Decentralization, Competition, and Sustaining Innovation

Concluding, Frey emphasized that technological revolutions depend on both decentralization—to explore new ideas—and bureaucracy—to scale proven ones. He noted early corporations like AT&T once relied on external patent markets rather than in-house R&D, and that today’s balance between small, nimble firms and large platforms will shape the next century of progress. Only by learning from history’s cycles of catch-up and collapse, he suggested, can nations strike the right institutional balance to keep innovation alive.

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