Addressing the Productivity Gap

ProductivityThe ONS quoted in the Guardian at the end of last year highlighted the productivity gap between the UK and other western countries such as France, Germany, Italy and the USA.
This was one of the key elements cited in the Chancellor’s Autumn statement highlighting what Britain needs to do to strengthen its economy in the coming months and years.

Interestingly, as productivity is the rate of output vs. input, these seemingly lower productivity statistics could be argued to be influenced by the UK’s lower unemployment rate, which we would actually consider to be a very positive thing. A further influencing factor could also be the firm establishment of the consumer culture in the UK that relies on “low level” service jobs, which require high levels of manpower and relatively few opportunities for productivity increases.

Based on all of this, the choice seems obvious. In order to increase productivity we as a country need to focus on the industries in which we can not only make productivity gains but also on industries that produce exports which generate global demand to limit over reliance on our own economy. The manufacturing industry, along with the high value services sector, certainly fits in both of these categories.

In order to increase productivity in the manufacturing sector, there are two firm strategies which should be employed, the first is investing in new cutting edge equipment. The second is bold and intelligent process improvement, which can take the same inputs (time, manpower, equipment, raw materials) and make them work harder and smarter for a business. Whilst the first strategy may be reliant on capital investment and sufficient cash in the business, the second often requires only expertise and intelligent application of specialist knowledge.

Interested in understanding how we can work with your business on the specialist application of knowledge for advanced process improvements? Contact for further details.