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The Great British Productivity Puzzle

30 November 2018

Man in front of lecturn
"Without productivity growth we will not achieve overall prosperity improvements," warns Professor Andrew Henley.

Attendees of the latest Cardiff Business School Breakfast Briefing have heard how UK productivity has flat lined since the onset of the financial crisis in 2008.

Delivered by Andrew Henley, Professor of Entrepreneurship and Economics at Cardiff Business School, the event profiled the work of the Productivity Insights Network funded by the Economic and Social Research Council.

The Network led from Sheffield University Management School with core partners across Higher Education, including Cardiff University, as well as in the public, private and third sectors is investigating how businesses can be more effective and get more out of their people.

Andrew Henley

“The key problem that the UK economy faces at the moment is that productivity growth has more or less evaporated since the onset of the financial crisis in 2008.”

Professor Andrew Henley, Professor of Entrepreneurship and Economics, Director of Research Engagement and Impact

“And that’s extremely worrying, because without productivity growth we will not achieve overall prosperity improvements”, he added.

One aspect of the challenge involves bringing diverse components together to work more effectively across areas like transport, the accumulation of education and skills, technology, health and wellbeing and research and innovation.

Professor Henley broadly outlined these components across five central categories:

  • Organisational - Data shows that many firms are a long way from the ‘frontier of productivity’ despite factors like competition, the operation of markets, the diffusion of technology and best practice.
  • Sectoral - One of the reasons the UK might have a productivity challenge is that it has a disadvantaged sectoral mix of industries.
  • Research, development and innovation - Countries across the EU put different levels of priority into these areas of activity which can be conducted within businesses, but also investment from government into basic and applied research through universities and other knowledge-led organisations.
  • Skills gap, health and wellbeing - Has the UK workforce got the skills that businesses need? And is the experience of the UK workplace one that promotes health lifestyles, which means that when people come to work they are engaged and productive?
  • Spatial - The UK has one of the highest levels of regional disparity of any of the advanced industrial countries.

Management and expectations

Woman presents in front of crowd
The ONS’ Management and Expectations Survey looked at practice within the manufacturing and services industries.

Katherine Kent, Head of Productivity at the Office for National Statistics (ONS), followed Professor Henley.

Katherine’s presentation introduced the work of the ONS and how it has become increasingly aligned with the UK’s productivity challenge.

She focused on ONS’ Management and Expectations Survey which looked at practice within the manufacturing and services industries.

Woman in front of lecturn

“Management practice is really the glue that holds labour, capital, services, energy and raw materials together.”

Katherine Kent, Head of Productivity at the Office for National Statistics

“Being able to utilise these in the most effective way will lead to productivity growth.”

Before handing proceedings over to the final speaker, Katherine introduced attendees to a comparison tool developed by ONS entitled ‘How productive is your business?’

The tool enables businesses to input their turnover and number of employees to determine their productivity which can then be compared to others across the UK in the same business size class and industrial sector.

Two main principles

Man listens to question from audience member
Allan Meek explains how SCS Group has "a strong purpose and the best customer service in the sector because of our engaged workforce.”

The final speaker, Allen Meek, founder and CEO of SCS Group, shared his career journey from construction worker to successful and effective CEO.

Allan, who is also a Cardiff Business School Public Value Entrepreneur in Residence, explained how he has used two main principles to ensure productivity for his business:

  • Common purpose;
  • And employee engagement.
Allan Meek

“They’re basic things but if you get these right, and you get engaged people, you can do fantastic things. And I think that’s the biggest impact on productivity, certainly for small businesses.”

Allan Meek, Founder and CEO of SCS Group

“So we worked hard on these two things. We have a strong purpose and the best customer service in the sector because of our engaged workforce,” he added.

Proceedings came to a close after a lively question and answer panel.

Crowd of people in front of sign
Attendees heard how UK productivity has flat lined since the onset of the financial crisis in 2008.

The Executive Education Breakfast Briefing series is a network that enables business contacts to find out more about the latest research and key developments from industrial partners.

If you were unable to attend, catch up with this live stream of the event.

Register now for the next briefing entitled, The Changing Face of Cardiff, which takes place on 13 December 2018 and will be led by Dr Brian Webb, Lecturer in Spatial Planning at Cardiff University’s School of Geography and Planning.

Enabling our business contacts to find out more about latest business research and key developments from industry partners and practitioners.