Published on 29 November 2023
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Independent growth and productivity institution needed to address UK’s economic challenges

The Productivity Institute and affiliated academic hubs highlight areas of policy for leaders to focus on so the public, private and civic sectors are better equipped to translate productivity gains into improved living standards and well-being across the UK.

Today sees the launch of a new Productivity Agenda highlighting key areas of policy for leaders to focus on to better equip the public, private and civic sectors to be able to translate productivity gains into improved living standards and wellbeing across the UK.

The report, published by The Productivity Institute (TPI) as part of National Productivity Week, is edited by the Bennett Institute’s Diane Coyle, and includes 10 chapters written by experts on productivity.

The agenda includes a joint note from TPI and the London School of Economics’ Centre for Economic Performance, for the establishment of a statutory institution – similar in scope and influence to the Office for Budget Responsibility and the Climate Change Committee – that puts productivity at the heart of the UK’s growth agenda. This proposal is made as part of this week’s National Productivity Week – an awareness campaign on the importance of raising productivity across the nation.

Productivity has deteriorated due to a long-term lack of investment, poor knowledge- and best practice-sharing among firms, and the lack of joined up government policies and institutions. The note states that addressing the UK’s productivity crisis is urgent if the country is to see sustainable increases in living standards once more.

The Productivity Agenda also addresses productivity in the context of current policy issues such as the green transition, digitisation and innovation.

Chapter 9 on “Regional productivity, inequalities, potential causes, and institutional challenges”, co-authored by the Bennett Institute’s Michael Kenny highlights that productivity differences across the UK’s regions have been increasing for 35 years; but, without institutional reform and more consideration being given to increased devolution, the divergence cannot be addressed.

The chapter on productivity and the public sector, co-authored by the Bennett Institute’s Nina Jorden, recommends three main areas on which pro-productivity policies in the public sector should focus: an adaptive organisation design; continuous innovation; and an agile workforce.

The Bennett Institute leads the Cambridge hub of the UK’s national Productivity Institute, a public-funded research body headquartered at the University of Manchester.

Bart van Ark, Managing Director of The Productivity Institute and a professor of productivity studies at The University of Manchester, said:

“Without productivity gains, economic growth and improvements in living standards are incredibly hard to achieve. What brings together political parties of all stripes is a consensus that productivity will be the lifeblood of a more stable, prosperous future.

However, the political environment is, and has been for some years, too uncertain, turbulent and febrile to deliver on a long-term, focused approach to pro-productivity policies which connects different policy domains across government. An independent productivity institution with influence across Whitehall and the devolved nations – and which is immune to changes in the political weather – is key.

The last 15 years have illustrated the scale of the challenge. Brexit, technology advances and the transition to net zero are all additional pieces that need to be fitted into the productivity puzzle. Now’s the time to solve the challenge by establishing an outfit and giving it the power to inform policy making that will benefit us all.”

Read: The Productivity Agenda

Media coverage: Independent growth and productivity institution needed to overcome UK’s economic challenges

The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.

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