Why is this related to inequality? Because the burden of this decline will fall on the bulk of the population. The continuing prosperity of the wealthiest, on the other hand, will be magnified.
For almost two centuries, today’s high-income countries enjoyed waves of innovation that made them both far more prosperous than before and far more powerful than everybody else. This was the world of the American dream and American exceptionalism. Now innovation is slow and economic catch-up fast. The elites of the high-income countries quite like this new world. The rest of their population like it vastly less. Get used to this. It will not change.
I think Martin Wolf's on to something with his assessment, but I think he needs to take it a little bit further down the path. Previous industrial revolutions have built the Western World we now live in. As with all foundations, though, when the house-keeping isn't kept, cracks start to form and new growth starts to take over.
Innovation isn't dead, because it isn't as tied to our current capitalist model of economics as we think. In fact, our understanding of how innovation really works is just now starting to bleed into our collective consciousness.
We are likely first-hand witnesses to the end of an era. That also means we get to be actors in the ushering in of a new one. Oh, the thinks we can think, eh? Welcome to the Conscious Revolution.