Unfortunately, according to the Office of National Statistics in February 2016, “The U.K.’s ‘productivity gap’ of about 14% is about twice as large as the gap for the rest of the G7”

Quoted in the FT, Ann Francke, chief executive of the Chartered Management Institute (CMI), said one problem is that in the UK, as opposed to Germany and the US, “managerial skills are not being taken seriously and not being valued”. “If you’re in the UK, being a manager is seen as having a big ‘L’ [for loser] on your forehead.” she said. Hopefully the same won’t be said of England’s 2018 world cup qualifying attempts.

Haldane believes that even modest management improvements amongst complacent companies could lead to an overall productivity leap. He says that there is “a statistically significant link between the quality of firms’ management processes and practices and their productivity.” The effect is large – “a one standard deviation improvement in the quality of management raises productivity by, on average, around 10%. This suggests potentially high returns to policies which improve the quality of management within companies”

It may be more difficult to improve productivity in a service economy such as the UK (the USA is also much more service orientated) but unless productivity improves living standards will remain flat and median household incomes will not improve – already a factor in social and populist unrest. Arguably world class management performance is even more important in service businesses because capital investment to improve performance can be less optional.

Perhaps one way forward is for the larger, successful business to take up the cudgels and incorporate SME mentoring in their mission statements (perhaps as part of their CSR obligations)…

As with UK drivers, most SMEs have only average productivity – time to wake up and take some advanced lessons if we want to improve….