Revisions to international comparisons of productivity, published today by the Office for National Statistics (ONS), confirm the Chartered Institute of Personnel and Developmentís (CIPDís) expectation that the UK has fallen further behind the US on both GDP per worker and GDP per hour worked measures of productivity. And the picture will look a lot worse when the ONS is able to provide comparisons for 2005 which saw a slump in UK productivity growth, says CIPD Chief Economist John Philpott.
Dr Philpott said:
ìThe latest productivity figures will make sober reading for the Chancellor. Not only is the gap with the US getting wider but were these figures to include 2005 it is likely that they would show the UK lagging further behind the US than when Mr Brown took charge at the Treasury in 1997.
ìUK productivity has improved a little compared to France and Germany in recent years. But this owes more to the relative weakness of the latter countryís economies in the first half of this decade than to the UKís own performance. Indeed, todayís figures highlight the need for the major EU economies as well as the UK to address a productivity slowdown.
ìAs the CIPD pointed out earlier this week, only around half the UKís productivity gap with the US is explained by lower investment in capital or skills, the ëresource gapí which the Chancellor has focused on with his incentives measures and training initiatives. The remainder, the ëefficiency gapí, is due in large part to inferior UK management practice, especially people management. This needs to be addressed by a joined-up Smart Work policy, targeted at laggard private sector business and public sector organisations, the latter in particular still struggling to boost productivity and performance ñ notwithstanding the Gershon efficiency driveî.
Widening US-UK productivity gap underlines CIPDís call for Smart Work policy
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