FEBRUARY 2020 COVER STORY
19
PUTTING
THINGS RIGHT
The UK lags behind the rest of the industrialised
world when it comes to productivity. What more
can be done to get the country back on track?
BY CHRIS BECK
www.manufacturingmanagement.co.uk
UK manufacturing is, rightly, held
up as a bastion of innovation and
quality that is respected across the
world. However, it also harbours
a dark secret – one that is holding
the industry back from reaching its
full potential and should be keeping industry
leaders and politicians awake at night. We are
facing a chronic productivity shortage.
The simple truth is that, on average, UK
workers are 45% less productive than their
American counterparts, and a fifth less
productive than those in Germany and France.
As Chas Moloney, a director at Ricoh UK &
Ireland, explains, the stereotypes don’t always
hold true. “People’s perception of French
workers is that they’re on holiday for all of
August, they work three days a week and have
four-hour lunch breaks. The reality is, though,
that the French are achieving by the close of
play on Thursday what we in the UK aren’t
getting done until the end of Friday.”
And it’s not showing any signs of improving,
either. Since the economic crisis of 2008/9, the
UK is the only major global economy not to
have seen productivity return to pre-recession
levels. ONS figures for productivity, measured
by output per hour, fell by 0.5% - the biggest fall
for five years – in the second quarter of 2019.
The latest statistics, for July to September 2019,
showed a 0.1% rise, continuing the relative
flatlining of the past decade.
In addition, research by the Universities
of Sussex and Loughborough found that the
productivity slowdown since the 2008 financial
crisis is nearly twice as bad as the previous
worst decade for efficiency gains (1971-1981) and
is unprecedented in more than two centuries,
when the move from steam to electric power
caused a record low level of productivity. One of
the report’s authors, Professor Nicholas Crafts,
has UK productivity levels “shockingly bad”.
Moloney is concerned that,
in a world where businesses
seem to be afflicted by crisis
after crisis – the skills shortage,
Brexit, political uncertainty
– productivity is all too easily
overlooked. “Productivity is
one of those things where the
ONS stats come out once a
quarter, it gets some coverage
in the news where everyone
says more needs to be done,
but then it gets forgotten
about,” he says.
This shouldn’t be the case.
A report, The Economy of People,
published in 2018 by Ricoh and
Oxford Economics, estimates
that solving the problem could
add almost £40 billion to the
UK economy. It’s clear, then,
that we should be talking more
about the productivity puzzle.
Years in the making
It wasn’t always like this.
Britain had the highest level
of productivity in Europe in
1960. It continued to grow
throughout the next 50 years,
but at a slower pace than other
countries, such as France and
West Germany, meaning that
45%
UK workers are less
productive than their
American counterparts
/www.manufacturingmanagement.co.uk