This paper sets out the evolution of Anglo-German comparative labour productivity levels since 1870, using a nine-sector disaggregation. Germany caught up with and overtook Britain in terms of aggregate labour productivity largely by shifting resources out of agriculture and improving her relative productivity position in services rather than by improving her position in manufacturing. The key role attributed by many economic historians and growth economists to technology transfer in manufacturing as a major factor driving convergence of productivity and living standards is called into question.