Report Summary

Manufacturing a solution to the productivity crisis

The UK has a productivity problem. The size of the problem is well understood, even if the exact causes are not. This report discusses the following key messages:

  • The UK will not achieve sustainable growth and improvements in living standards without an improvement in productivity over the next five years.
  • Short term gains will be most easily achieved from the firms and sectors with a good track record of strong productivity growth – this includes manufacturing, which could account for 40% of productivity gains over the next 10 years.
  • Government policy can be an enabler of stronger productivity growth by prioritising resources towards improving skills, raising innovation levels and creating a competitive tax system for investment in new technologies. Barriers to securing greater productivity gains can also be dismantled.
  • Businesses must also play their part by investing strategically, collaborating with supply chains and developing the skills and capabilities of their workforce.
  • Some areas of government spending are critical to improving the productivity of all businesses. Infrastructure investment must not suffer in forthcoming spending reviews. Longer term productivity gains will also need to come from spreading best practice from the private sector to public services.