The productivity gap between the UK and the US and Europe could be eliminated if UK skill levels were improved, according to a report by the National Institute of Economic and Social Research.
The average UK employee produces 20-30% less than in the US, Germany and France, but slightly more than workers in Japan. The differences between the UK and Europe are almost entirely accounted for by varying skill levels, says the report. However, it warns that even if young people receive more training, Britain’s workforce will continue to be dominated by less-skilled older workers for a long time.
The relative advantage of the US cannot be explained simply in terms of skills and equipment, says the report’s author, Mary O’Mahony. US superiority `owes much to greater economies of scale, a more competitive environment and less regulation’.
The UK makes up for part of its productivity disadvantage by having longer working hours and more people in employment, the report concludes.
UK US France Germany Japan
All sectors 100 121 132 129 90Engineering 100 195 142 115 235