Solving the UK’s productivity problem
This spring, a three-year, £11 million bundle of research projects was launched in the latest of many bids to resolve what is probably the UK’s most enigmatic economic challenge: the stagnation of national productivity since the recession of 2008-9, writes David Sapsted.
L
abelled the “great productivity puzzle”, it continues to
confound economists, academics
and politicians alike, despite the current Government’s pledge to restructure the UK economy to create a “high wage, high skill, high productivity” society. Now, the Economic and
Social Research Council (ESRC) is funding seven new research projects that will look at specific subjects – including diversity, the green economy, mental health, financial markets and salaries – to determine what effects they have on the nation’s flagging productivity. Launching the latest scheme,
Professor Alison Park, Interim Executive Chair of the ESRC, said: “Funding research to understand the issues driving low productivity
continues to be of paramount importance to the Economic and Social Research Council. Expanding our research portfolio in this way could ultimately improve the lives of millions of people in the UK, as it is addressing arguably the UK’s biggest economic challenge.” Hot on the heels of this initiative,
Britain embarked this summer on the world’s largest trial of a four- day working week, involving 3,300 workers at 70 companies. The six- month trial, which involves firms ranging from financial services to a take-away restaurant, will focus on the impact of the four-day week on productivity levels, gender equality, the environment and worker wellbeing. But the challenge to solve the
productivity puzzle is as vast as it is complex. Among the G7 nations,
the productivity gap between the UK and the United States, France and Germany stands at 14% – the biggest difference since the Office for National Statistics began collecting data on the subject more than a quarter of a century ago.
LEVELLING UP ON PRODUCTIVITY So, is it just a case of British workers not pulling their weight? If only it were that simple. “One of the most striking features of the puzzle is the variability by international standards of productivity between regions. The UK has regions that are amongst the most productive in the developed world and others that are now less prosperous than regions in the former East Germany,” says Owen Garling, Knowledge Transfer Facilitator at
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THINK GLOBAL PEOPLE PRODUCTIVITY
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