In a speech to the LSE this week, BoE Chief Economist Andy Haldane set out a view of a two-tier corporate economy where ‘leaders’ coexist with ‘laggards’. Haldane cites recent research suggesting that a fall in real estate values during the financial crisis tightened collateral constraint and credit conditions for small business, and was ‘a potent crisis propagation channel’. However, this does not explain the subsequent failure to improve productivity as asset prices have recovered. For this, he points to a failure of innovation to ‘trickle down’ from market leaders, due to IP constraints, natural monopolies and management failings. This diffusion lag is creating ‘clear and widening blue water’ between the top 5% of firms and the rest. This, more than regional or sectoral disparities, is what Haldane considers is responsible for global productivity stagnation.