On 7 March 2000 – three days before the tech-heavy NASDAQ Composite stock index hit a peak that it would not reach again for 15 years – almost 400 people crowded into the Connaught Rooms, a conference venue in central London. The event, entitled “Knowledge 2000”, had been organized jointly by the UK's Department of Trade and Industry and Department for Education and Employment. It brought together business and labour interests to discuss how to build a successful, knowledge-driven economy fit for the challenges and opportunities of the twenty-first century. The attendee list testified to the breadth of the coalition backing this agenda. Representatives from the Confederation of British Industry mingled with representatives from the Trades Union Congress. Antonio Guterres – then Portuguese prime minister and president of the European Council, later to be secretary-general of the United Nations – was also present, a symbol both of the strident internationalism of the New Labour government and of the global appeal of knowledge-driven growth. Topping the bill of speakers was Tony Blair, who was exactly 15 months away from a general election that would see him win the second-largest UK parliamentary majority of the postwar era – eclipsed only by the record he himself had set just under three years before. In his keynote address, Blair outlined an economic strategy that would capitalize on the opportunities of the knowledge economy era, generating a truly inclusive form of growth: “Knowledge and skills, creativity and innovation, adaptability and entrepreneurship are the ways by which the winners will win in the new economy … That way we can all prosper.”

Over the next two chapters, we will map out the economic policy agenda championed by advocates of knowledge-driven growth in the 1990s and early 2000s. Four elements of this agenda stand out. First, policy-makers believed that social investment in education, infrastructure and research would act as a magnet for internationally mobile knowledge jobs and would help knowledge-intensive industries to grow. Moreover, these social investments would combat poverty and social exclusion, overcoming differences in opportunity between economically marginalized people and places and their more affluent peers. Knowledge-driven growth also required dynamic markets, aided by the removal of tax and regulatory burdens that might hamper businesses from responding in an agile fashion to their rapidly changing environment.