Productivity in the UK has been stagnating since the 2008 financial crisis, lagging behind many other comparable economies. Successive UK governments have tried to solve this puzzle but with little success so far. According to the Financial Times, lower productivity rates can be attributed to the country’s longstanding problems like low investment and skills gaps that have been further exacerbated by the overconfidence of managers. Data suggests that UK firms are conscious of the importance of productivity but have not implemented changes to improve it. Even ongoing technological advances have yet to significantly improve productivity, reports the BBC. Experts recommend companies focus more on developing management capabilities, adopting technology, measuring productivity accurately, and aligning different departments to a common productivity goal.
How can policymakers successfully incentivise companies to adopt a long-term perspective on productivity?