The UK needs a statutory body with a long-term focus on productivity
The UK needs to tackle its productivity problems urgently to improve growth.
A high degree of policy churn has led to recent strategies and plans seeking to address the UK’s growth problems struggling to have an effect. The Productivity Institute and the Programme on Innovation and Diffusion have called for a growth and productivity commission to help with the politics of making difficult long-term decisions.
A new UK policy institution for growth and productivity – a blueprint
Addressing the UK’s productivity problem requires increased long-term investment and a new Growth and Productivity Institution (GPI) would help to ensure that the appropriate policies are in place to achieve this.
Such a body, placed on a statutory footing to ensure it survives political churn, would provide independent expertise and credibility to shape effective, coordinated and lasting pro-productivity policy.
Find out more by reading and downloading A new UK policy institution for growth and productivity – a blueprint in The Productivity Agenda, written by:
- Anna Valero, Distinguished Policy Fellow, LSE; Growth Programme Director, Centre for Economic Performance; Deputy Director, Programme on Innovation and Diffusion.
- Bart van Ark, Professor of Productivity Studies, Alliance Manchester Business School, and Managing Director, The Productivity Institute.
Professor Diane Coyle, one of the directors of The Productivity Institute discussed the recommendation on BBC Radio 4 Today on 28 November (starting at 20 minutes in). She said:
“We’ve not been investing enough, not in business, not in infrastructure, not in education, not in research, for a long period now. And if you don’t do the investment, you’re not going to get the growth. Coordination across different policies is important and across different levels of government. You can’t fix this kind of systemic problem by picking off one thing at a time, you have to coordinate all the different kinds of policies. And in particular, policy instability. Asking people to make decisions about their lifetime careers or businesses to make investment decisions with a 10 or 20 year horizon – it’s just hard to overstate how much damage it does that the policy environment keeps changing so often.
So one of the things that we’re calling for in a report we’re putting out this week … is for an independent commission or institute that will be able to look at policies over the long term, talk about how effectively they’ve been implemented and how effective this kind of coordination and stability is that we so desperately need.”
The UK’s productivity challenge: people, firms, and places
How can the UK reverse its poor productivity performance? The Productivity Agenda also examines coordinated actions under the three pillars of people, places and firms to tackle the challenge:
- Chronic underinvestment in the economy
- Inadequate diffusion of productivity-enhancing practices
- Institutional fragmentation
Even doubling the current productivity growth rate from 0.5% to 1% a year over the next 12 years will only be sufficient to achieve the same rate of GDP growth as in the past decade. There are also persistent and relatively large gaps in regional productivity in the UK which have hardly reduced over the past ten to 15 years.
The UK needs to develop an integrated range of pro-productivity policies and commit to them for the long-term. They need to co-ordinated vertically between national, devolved nations, regional and local governments.
Find out more by reading and downloading The UK’s productivity challenge: people, firms, and places in The Productivity Agenda written by:
- Bart van Ark, Professor of Productivity Studies, Alliance Manchester Business School, and Managing Director, The Productivity Institute
- Mary O’Mahony, Professor of Applied Economics, King’s Business School, and Research Director, The Productivity Institute.
The Productivity Agenda
The Productivity Agenda showcases key policy areas to focus on so the UK can be better equipped to translate productivity gains into improved living standards and well-being and was released as part of National Productivity Week.
National Productivity Week
The National Productivity Week is an initiative to raise awareness of the importance of productivity and its impact on the economy, society and the environment. It is organised by The Productivity Institute, which is funded by the Economic and Social Research Council. Find out more by visiting https://www.productivityweek.co.uk/