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Addressing productivity challenges in Wales

30 January 2024

In a recent breakfast briefing hosted by Cardiff Business School, the spotlight was on the pressing productivity challenges in Wales and potential pathways towards improvement.

The event took place during The Productivity Institute's National Productivity Week 2023.

Chaired by Professor Andrew Henley, the Wales lead for the Productivity Institute, the briefing featured insights from Professor Bart van Ark, The Productivity Institute’s Managing Director and Principal Investigator.

Professor van Ark discussed the recently launched Productivity Agenda and highlighted the broad spectrum of factors affecting productivity, including skills, technology, innovation, policy, and politics.

Concerns about the UK's low productivity growth were raised, attributed to factors such as an aging population, working hours, climate change, and post-Brexit globalisation. Professor van Ark said: “the challenge ahead of us is just enormous and gives us a reality check.”

On ways to improve productivity, he emphasised the need for increased investment, better knowledge diffusion, and a shift away from centralised policymaking. The concept of inclusive growth was introduced, emphasising widespread access to resources that enhance productivity for all. Professor van Ark also proposed the establishment of a new institution focused on productivity and growth to drive the agenda forward.

Next to speak was Professor Andrew Henley, who addressed Wales-specific challenges and the nation's lagging productivity compared to other UK regions. He talked through regional productivity differences, explaining rural areas in Wales have particularly low productivity.

A graph depicting real output per job which placed Wales at the bottom was shown. Professor Henley explained that if Wales had a productivity level that was the same as the UK average, it would have an economy that was £13bn larger.

On what drives low productivity in Wales, Professor Henley discussed micro and macro factors such as skill levels, employee engagement, regional industrial structures, and weak research and development performance.

He proposed potential remedies, including a Wales Productivity and Investment Commission, urging concerted efforts to overcome policy churn and institutional shortcomings.

To provide an organisational perspective, Tom Wilkinson from Barcud Shared Services, and a participant in Cardiff Business School’s Help to Grow Programme, was next to speak. He emphasised the significance of measuring productivity. Tom also shared how Barcud's trial of a four-day working week resulted in increased productivity, employee morale, and improved recruitment outcomes.

The event concluded with a lively Q&A session, covering topics such as balancing growth with climate concerns, employee-driven innovation, rural Wales investment, and examples of inclusive growth.

Watch the full recording of the breakfast briefing:

Cardiff Business School's Breakfast Briefing Series is a network of events which enables business contacts to find out more about the latest research and key developments from industrial partners.

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