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The main issue that is so frequently overlooked in the conventional wisdom regarding UK productivity is the sectoral breakdown that you reference in your second point. The reality is that over the past 30 years the UK economy has undergone a structural employment shift, with the vast majority of the almost 500m increase in total hours worked concentrated in sectors with below 90% of average productivity (including the public sector, where measurement remains notoriously difficult), while high productivity sectors such as oil production have seen a marked reduction in their role. In addition, historically (and probably unsustainably) high productivity growth in financial services has completely stalled since the financial crisis as profitability has been stripped out of this sector through tougher regulation and tighter margins. None of this means much for what we conventionally think of as productivity, and once it is excluded the trends are much less worrying than they initially appear. It is lazy thinking to follow the conventional ‘low productivity -> more investment required’ argument without more attention to detail, especially when some of the forms of investment advocated have a very unclear relationship to future productivity gains.
Good article but a area to look at are the councils who are employing ooo’s how productive are they?
There is no focus on productivity increases especially in councils
What about the distribution of our national research effort which is hugely concentrated in the golden triangle? If that’s where the research is, that’s where the researchers will be, and that’s where ideas will emerge. And if they are 200-300 miles way from the big cities you won’t get much transmission from research to business: hence low product and process innovation and low productivity. This is more regional than urban problem, I suggest.
Makes sense. Productivity gains mostly come down to buying bigger machinery and more automation. Barwork and hairdressers cannot be automated. Robots have to improve a lot before I let one loose on my barnet with scissors!