Why productivity stagnation matters
The Productivity Institute
The Productivity Institute aims to better understand, measure, & enable improvements in productivity across the UK.
Eight things that politicians should be talking about were identified by David Smith, Economics Editor of The Times, in a recent column. The first one – Productivity Stagnation.
He wrote:
“Productivity — the amount produced by each worker, or each hour worked — started to stagnate more than four general elections ago and has remained unaddressed since. It is the ultimate driver of living standards, and its stagnation explains why wages, in real terms, are lower now than they were in early 2008, 15 years ago. This is the weakest sustained period for real wages since before the industrial revolution. The squeeze on living standards and the rise in the working poor drives more people into dependence on benefits. Most of the debate about how to lift productivity, by boosting investment, the quality of the infrastructure, innovation and skills has taken place outside government, and outside parliament.”
"Productivity isn’t everything, but in the long run it is almost?everything”
Productivity is important from a monetary perspective: if production per hour worked since 2007 had increased at the same rate as it did in the 15 years before, the economy would have been some ￡300 billion larger today – equalling an average extra gain of about ￡11,500 per household in the UK.
But that’s not the whole story. The Productivity Institute’s journey started with a narrative about why productivity matters for business, workers and society, and how it ultimately improves people’s livelihoods across the nation.
As Nobel prize-winning economist, Paul Krugman, once quipped: “Productivity isn’t everything, but in the long run it is almost?everything.” That statement is no overstretch. Productivity helps businesses to use their resources more efficiently, freeing up money for investment in new business activity and jobs. Productivity supports workers’ income. And productivity helps society as the proceeds from technology and innovation spill over to other aspects of life, including health care, education, and smarter ways to clean up our environment.
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Why does productivity matter?
The Productivity Institute has a podcast series discussing a wide range of productivity issues, which is now in its second series. Our first episode featured guests Andy Haldane, Dame Kate Barker and Professor Nick Crafts explaining what productivity actually is and why it matters to everyone.
About The Productivity Institute
The Productivity Institute was set up in 2020 with the aim of providing solutions to the UK’s stagnating productivity, funded by the Economic Social Research Council through the largest single grant in its history.
Our interdisciplinary world-class research draws on expertise from social sciences, engineering, physics, political science, business management, innovation research and data science. This research is developed in collaboration with business, through our eight Regional Productivity Forums, and policy users, through The Productivity Commission, which is led by partner NIESR.
Our academic partners are: 英国剑桥大学 , 英国卡地夫大学 , Economic Statistics Centre of Excellence (ESCoE) , 英国格拉斯哥大学 , 英国伦敦大学 - 伦敦国王学院 , National Institute of Economic and Social Research (NIESR) , Queen's University Belfast , 英国谢菲尔德大学 , 英国曼彻斯特大学 and 英国华威大学 .
Absolutely! Boosting productivity in the UK has wide-reaching effects, not only on the economy but also on the quality of life for its citizens. It's an important goal that benefits everyone. Let's work together to enhance productivity and elevate living standards. ?? #UKProductivity #QualityOfLife #Productivity