Productivity, Place and the Power of Alignment: Reflections on Six Years at TPI

By Bart van Ark, outgoing Managing Director at The Productivity Institute

Some reflections as I hand over the leadership of The Productivity Institute.

When I first became involved in shaping the bid for a new ESRC institute on productivity in 2019, one thing was clear from the start: this could not be another London-led consortium. If we were serious about the UK’s productivity problem, we had to look beyond Whitehall and the capital. The challenge was national, but it was also deeply local. Productivity gaps between London and many other regions and cities in the UK are too large, too persistent and too important to treat as background noise. They had to be at the centre of what TPI had to be about.

That is why, at the time, placing The Productivity Institute’s headquarters in Manchester felt right — not just symbolically, but practically. It helped us draw more directly on the expertise of scholars, policymakers and practitioners across the country. Still, who could have imagined that six years later, as I hand over the baton of Managing Director to Jun Du, “Manchesterism” would be part of the national conversation, and TPI would find itself just down the road from a new centre of political attention: No. 10 of the North?

A place-based approach to productivity

It would be a stretch, of course, to claim that TPI caused the recent rise of Manchesterism — although several of my colleagues recently provided some important insights on it – and more far-fetched still to suggest it explains the first green shoots of stronger productivity growth. But the moment does reinforce what we argued from the beginning: the UK’s productivity problem has deep regional roots, and those roots have to be properly understood if they are to be addressed.

Being based in Manchester has kept us close to many of the questions now at the centre of the national debate: what makes some places more productive than others, why the gaps are so hard to close, and how policy, business and research can work together more effectively.

Back in 2020, there was a real appetite for this place-based approach. Even with the disruption of the COVID-19 pandemic, we were able to establish the Productivity Forums with surprising speed: five in England, later joined by a sixth to give better coverage to the West of England, alongside forums in Scotland, Wales and Northern Ireland. I think we can claim that, for the first time, productivity challenges across the UK are being addressed in a sustained, regionally grounded way, bringing together researchers, policymakers and business leaders in each part of the country.

By 2021, the forums had brought that regional work together in first version of their regional assessment. They set out the opportunities for regions and devolved nations and making the case for governments at all levels to take a genuinely place-based view of productivity growth. The analysis and policy ideas were updated in the Regional Productivity Agenda in 2025.

“I think we can claim that, for the first time, productivity challenges across the UK are being addressed in a sustained, regionally grounded way.”

From diagnosis to answers

That early focus on place helped sharpen our diagnosis. From the start, we built a broad research agenda around the main drivers of productivity: human, knowledge and organisational capital; geography; the net zero transition; macroeconomic policy; governance; and measurement. That work fed into our first National Productivity Agenda, published in 2023, which identified three areas where action was most urgent: reviving investment in tangible, intangible and human capital; unlocking the diffusion of knowledge across sectors, firms and places; and reducing the fragmentation of institutions, together with the instability and churn that too often characterise policymaking.

From there, we moved towards more specific questions about how productivity growth can be delivered in practice and sustained across different places. Why do productivity gains remain so uneven despite rapid advances in technology, skills and knowledge creation? How can firms adopt and implement digital tools more successfully? How do skills, job design and worker voice shape performance? Why are finance and investment still so constrained? And how do regional institutions affect the diffusion of knowledge and capital? More broadly, what combinations of capabilities, incentives and institutions are needed to turn innovation into broad-based, sustained productivity growth?

No silver bullet but alignment

One could argue that this research agenda was too broad. Would it not be better to focus on one big thing that could shake up the system: recreating the American success of Silicon Valley, radically reforming education, removing barriers to trade, or something else altogether? These are all interesting ideas. But after Brexit, Britain’s appetite for bold experiments in uncharted policy territory may not be what it once was. More importantly, none of them offers a silver bullet for the UK’s productivity problem. The issue is not necessarily a shortage of ideas, large or small. It is our difficulty in joining up the various parts of the system.

And that is also what our research told us. Earlier this year, when Mary O’Mahony and I summarised more than 80 pieces of TPI research undertaken in the past few years, we came to a clear conclusion: what is missing, at almost every level, is alignment between policies, strategies and institutions. Productivity gains depend on the co-evolution of skills, job design, technology, business models, investment finance, absorptive capacity and governance.

I have been reflecting on the implications of that conclusion a great deal. At the level of the business, alignment is already hard enough. Our Executive Education course on Strategic Productivity, developed at TPI and now delivered to five cohorts of business leaders, has reinforced that point again and again.

Highly productive firms rarely get there by pulling a single lever. They make progress by combining digital transformation, skills, management practices, innovation and investment into a coherent strategy – and by keeping those elements aligned as markets, technologies and organisations change. There is no single top lever for strategic productivity: the right priorities and combinations are highly context-specific, and the most important asset is the ability to change in a structured and disciplined way.

In the policy world, alignment is even more challenging. In recent work with Dirk Pilat and Klaas de Vries, I explored the multifaceted nature of pro-productivity policies. We subsequently commissioned 17 country studies reviewing policies over five to seven decades, which revealed a highly diverse set of approaches. The lesson is that no single model can be copied wholesale, but that pro-productivity policies need to be well designed, carefully assessed against risks and protected from other policy choices that may blunt or even undermine their effects.

Pro-productivity policies cannot simply be engineered from the top down. This is a messy world of firms, sectors, places and institutions that cannot easily be aligned by design. Some might argue that, especially in a period of rapid technological change, productivity growth will come fastest if firms at the frontier are allowed to move ahead. There is some truth in that. But it is only part of the story. Silicon Valley and other major technology hubs did not emerge overnight. They took decades of hard work, collaboration and institutional development – some deliberately engineered, some more spontaneous. More importantly, the real productivity gains from a stronger frontier depend on whether innovations diffuse across the wider economy. That is often where the binding constraint lies.

Taking it one step further, productivity growth only really matters if it helps deliver more inclusive growth. That does not happen automatically. Policy has to widen access to the things that make people, firms and places more productive – skills, infrastructure, housing, finance and business support. It also has to make sure that markets work well, that workers and communities can adapt when change is disruptive, and that the gains from higher productivity are shared more widely. In short, productivity policy is not just about raising output. It is about building a stronger economy in which more people and places can take part.

If that is the ambition, government has to play a role – in Westminster, Manchester and elsewhere. It needs to help coordinate, align and, at times, intervene. But good productivity policy is not only about knowing when to act. It is also about knowing when to step back, remove obstacles and let firms, workers and places get on with the job.

“Productivity policy is not just about raising output. It is about building a stronger economy in which more people and places can take part.”

Productivity and political churn

During my six years as TPI Director, I worked through five UK governments. Four of them took productivity seriously in one way or another, though each struggled with it differently. I saw the final days of the Johnson government at close range, including a visit to No. 10 while it was trying to rescue its growth agenda. While that didn’t materialise, the “levelling up” slogan has left a mark on the policy language, and our Investment in Places Campaign has built on some of its core ideas.

The Sunak government took public sector productivity seriously, and even if there was not enough time to see it through, we were able to help shape a sizeable research and action agenda around it. Under the Starmer government, we contributed to the development of the 2025 Industrial Strategy. I still see it as one of the more thoughtful recent industrial policy agendas in this space. It combines a focus on key sectors with an understanding that productivity also depends on the horizontal foundations: skills, regional performance and technology diffusion.

And now, in August 2026, the conversation has returned to Manchester, with a No. 10 on our doorstep and a renewed commitment to devolution. Could this deliver the results we and others have long been calling for? Possibly. But it will not be easy. Industrial strategy may be back in the hands of one of the ministers who helped create it, but the real test will be whether it can be sustained, stabilised and delivered in practice. The risk of policy churn is never far away.

Industrial strategy only works when it provides direction through clear choices. Loading it up with slogans such as “growth in every postcode” risks blurring that focus. I would place greater emphasis on strengthening the horizontal foundations of pro-productivity policy beyond industrial strategy itself, by joining up existing policy areas more effectively. One way to do that, as we have suggested before, would be through a Productivity Commission, similar to those found in other countries.

There is also a risk that the renewed enthusiasm for devolution runs ahead of the institutions needed to make it work. Combined Authorities have shown to be effective not only in Manchester, but also in London and West Midlands. But in places made up largely of smaller towns or mainly rural areas, where institutional and political cohesion is weaker, they are at best a partial answer. Progress is possible, but it will take time. Whether any government is given that time is partly a political question, partly an economic one, and above all an institutional one.

“I would place greater emphasis on strengthening the horizontal foundations of pro-productivity policy beyond industrial strategy itself, by joining up existing policy areas more effectively.”

What comes next

As I leave the role of Managing Director, it is not for me to determine where TPI goes next. But the world now feels like it is in almost continuous flux. Productivity gains made in one period are not automatically sustained when new technologies arrive, markets shift, trusted institutions fail or adapt, new ones emerge, and old political coalitions give way to new ones. That is why I agree with my successor, Jun Du, that the productive foundations of an economy – “the institutions, the external architecture, and the distributional settlement on which productivity rests” – need to be tested for their durability and resilience over time. Only then can productivity remain a key driver of progress.

Linking the past and the future of The Productivity Institute, what do I hope will remain? Above all, the community we have built. Bringing together scholars and practitioners from policy and business around the topic of productivity has been one of TPI’s great successes. There is no silver bullet for productivity. But collaboration – or at least mutual understanding – between research, policy and business is a precondition for any serious recovery in productivity that also supports inclusive growth.

I have been struck again and again by the willingness of people across the UK to make productivity work – not as an abstract concept, but as something that can improve firms, places and people’s lives. That is a strong basis for building a more resilient environment for sustained productivity and inclusive growth. We need it more than ever. My hope is that TPI will continue to grow as a force for exactly that.

“Bringing together scholars and practitioners from policy and business around the topic of productivity has been one of TPI’s great successes.”