Since the global financial crisis, many developed democracies have experienced seismic political upheavals. Knowledge-driven growth strategies – and their champions in the political establishment – today stand on unstable electoral ground. Centrists of both the left and the right have seen their vote share eroded. Party systems that just a few years ago appeared frozen have suddenly become fluid. New political movements and organizations have seized votes, seats and even government office from their better-pedigreed rivals. In other cases, outsiders have contested the leadership of mainstream parties, posing serious challenges to candidates favoured by established party hierarchies and powerbrokers, and on occasion even emerging victorious. These outsiders pose serious challenges to diverse aspects of the knowledge-driven growth agenda: calling into question everything from its commitment to international openness to its celebration of dynamic markets, from its vision of prudent macroeconomic policy to its insistence that social investment will suffice to tackle problems of inequality and exclusion.

In Part I, we explored how the knowledge-driven growth agenda came to dominate economic policy debate and practice in developed democracies from the early 1990s onwards. In Part II, we examined the diverse ways in which that knowledge-driven growth agenda has fallen short. In this chapter, we unpack the political implications of those shortcomings. The chapter begins by revisiting the idea of the knowledge economy as a growth regime: a set of economic policy ideas and assumptions that are underwritten politically by a distinctive coalition of supporters. It identifies three groups who have been particularly badly affected by the shortcomings of knowledge-driven growth, and thus who are particularly likely to withdraw their support from the status quo: younger people, lower-paid and/or lower-skilled workers, and residents of regions undergoing relative economic decline. The chapter goes on to examine electoral data showing declining levels of support for the political mainstream, as well as evidence that these declines are particularly pronounced among the three groups that our analysis predicts. The chapter concludes by comparing this analysis to alternative accounts of the outsider insurgency, showing how it is compatible with these rival explanations but also how it is complementary to them, filling in their gaps and resolving their inconsistencies.

Fragmentation

As outlined in Chapter 1, a growth regime consists of two components. It denotes a set of ideas about the causal mechanisms underpinning economic growth, on the back of which governments base their policy choices.