The latest labour productivity report from the Office for National Statistics (ONS) makes grim reading. The ONS report that “…the absence of (UK) productivity growth in the seven years since 2007 is unprecedented in the post-war period…” Put that into context with the head of the IMF, Christine Lagarde’s statement on 9th April that the drop in productivity growth was the most pressing deep problem in the global economy and we all clearly have a long way to go. While global growth is running at roughly the average of the last three decades, it is just not good enough to offset the lingering impact of the Great Recession, ranging from low growth and low inflation to high unemployment and high debt, according to Lagarde.
The FT has also been busy looking at these data. It points at lawyers, accountants and management consultants lying at the heart of the UK’s productivity problem and explaining that almost a quarter of a shortfall since 2008, is the stagnation of productivity in just four sectors — professional services, telecommunications and computing, banking and finance and manufacturing. The old joke of consultants borrowing your watch to tell you the time and then not giving your watch back seems to have been extended by them now sending in a repair bill…
But the buck doesn’t stop there. The UK economy is failing to innovate, according to the FT. Neil Carberry, director for employment and skills at the CBI has said that “UK businesses have made good progress on job creation but productivity has not yet followed suit, “The focus now must be on spurring businesses to innovate and raise their performance.”
Time for the new government (and the UK’s consultants) to get creative…
