In July 2016, Lloyds Bank and the MTA surveyed 1500 British businesses including 300 manufacturers about their views on UK productivity trends and 58% saw productivity growth as a problem for the UK economy.
As Nobel winning economist Paul Krugman once wrote “productivity isn’t everything, but in the long run it is almost everything”.
In the survey, three of the key areas which affect productivity growth are:
- Skill shortages
- Investment
- Innovation
with skills seen as the biggest barrier to growth.
There was a clear message to government that delivering a killed workforce and a tax system which was pro-investment, particularly in science and innovation. Many businesses also highlighted the uncertain economic conditions as the greatest obstacle to investment with cost and availability of fiance also an issue.
Planning changes things
However, the picture wasn’t all doom and gloom. For many of the businesses surveyed, while they saw a general backdrop of a productivity challenge, for their own businesses they felt the impact was much reduced. Why? Because a plan was in place which recognised the issue and put strategies in place to address them. Because of that only 25% saw productivity as a problem for their business.
Have you got a plan?
With this survey emphasising the importance of good planning to address the Productivity Gap, the challenge for all of us in our businesses is have we got the right plan in place. If you’re uncertain or would like a health check on your current plans then do get in touch today.