The Productivity Institute: Can productivity unlock the UK economic revival?
In this session, Professor Bart van Ark, Managing Director of The Productivity Institute, will present a diagnosis of the specific UK issues that have been identified in its research to date. A panel of experts and practitioners will then discuss and explore the things that businesses and government need to address in order to make the UK a competitive and productive place.
Productivity helps businesses to use their resources more efficiently, freeing up money for investment in new business activity and jobs. Productivity supports workers’ income. And productivity helps society as the proceeds from technology and innovation spill over to other aspects of life, including health care, education and smarter ways to clean up our environment.
However, the UK is in a productivity slump and has been since the 2007-08 global financial crisis. Had productivity in the UK grown in line with its previous trend, the UK economy would be approximately £300 billion larger today. Compared to many of the UK’s peer nations, such as France, the USA and Germany, UK productivity is lower, and by some estimates up to 20% lower. If production per hour worked since 2007 had increased at the same rate as it did in the 15 years before, the economy would have been some £300 billion larger today – equalling an average extra gain of about £11,500 per household in the UK.
The Productivity Institute has formulated a diagnosis of the UK productivity problem and Professor Bart van Ark, its Managing Director, will address this in his presentation to Trade Unlocked. There are two key issues:
1. A chronic and broad-based degree of underinvestment in the UK economy – including physical, human, and intangible capital – both publicly and privately
2. A lack of diffusion of productivity-enhancing practices between firms and places across the UK because of malfunctioning policies, institutions, and public governance
A discussion with a panel of experts will then explore this further.
The Productivity Institute is a national, ESRC funded research organisation that has been studying the UK productivity puzzle since its launch in September 2020. It is headquartered at Alliance Manchester Business School with partners including the universities of Cambridge, Cardiff, Glasgow, Warwick, Sheffield, King's College London, Queens Belfast and the National Institute of Social and Economic Research.
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