Three ways to improve British Productivity
Productivity is now a key issue for the UK economy. How much we produce, as a nation, per hour, is now 30% less than Germany, the US and France, we are even 10% less productive the Italians. According to the OECD, this weak productivity is problem for us because it keeps wages low, which in turn keeps economic growth stagnant. The cause of this poor productivity can be put down to three major factors, investment, management, skills, and the lack of them.
1. More Investment
We don't spend enough on Infrastructure and technology. We are held up waiting for trains and in traffic jams. Machinery and equipment is out of date compared to other major economies. A supply of cheap labour means there is a reluctance to invest newer and less labour intensive technology. And new innovative businesses can find it difficult to raise capital.
2. Better Management
British companies compared to those in other economies are more likely to be badly managed. Whilst there are of course many well managed British companies we have more than our fair share of those that are not. This accounts for about a quarter of the difference.
3. More Skills
The education and training of our workforce is also a problem when compared others, such as the Germans. They can get more out of their technology than we can. Our businesses can struggle to find people with the skills when they do need them.
Boasting investment, innovation, skills, and improving management is now on the agenda. The Chancellor, George Osbourne, is now pushing for the economy to find another gear. Also the Scottish Government is looking to boast productivity through greater innovation, investment and developing skills. This is hoped to lead to better paid jobs and economic growth. Information Technology is one area known to help. The notion that IT reduces productivity is now discredited, as we have shown here, well managed and skilfully used investments in IT have proven economic benefits.
Read More
Why the productivity gap? Jonty Bloom Business correspondent, BBC News, 21 May 2015
OECD warns UK must fix productivity problem to raise living standards Katie Allen, the Guardian, February 2015
Innovation key to Scottish Government's plan
The Solow Paradox - and how it's been solved IT and Productivity
Unternehmergeist the Entrepreneurial spirit
May 2015
| Duncan Stonebridge.
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