By Dr Richard Wilson –
Many advanced industrial countries have experienced disappointingly low productivity growth since the financial crisis and recession, but as Martin Wolf notes in today’s Financial Times (‘British business is starting to look more Italian’), the UK’s performance has been particularly poor. According to research by the Conference Board, the rate of growth of output per hour between 2007 and 2016 has been just 0.1 per cent per annum in the UK. In contrast, output per hour increased at annual rate of 0.5 per cent in France and Germany, by 0.6 per cent in Japan, by 0.8 per cent in the USA and Canada, and by 1.3 per cent in Spain.
The UK needs to improve its productivity performance to enhance living standards, improve business competitiveness and strengthen the Government’s finances. To improve productivity we must increase capital investment, promote innovation, encourage competition and make decisive improvements in skills, training and education at all levels.
Increasing productivity is the key strategic challenge for firms, sectors and the United Kingdom.