The CBI’s recent calls for a national campaign to promote best-practice and benchmarking in British industry look like a logical approach to boosting productivity. The traditional changes most people associate with productivity increases – better technology, fewer people employed -only account for a small part of the overall picture.
More than half the growth in manufacturing productivity can be accounted for by just finding different ways of using existing people and resources.
Investment though, still accounts for about a quarter of the effect. British investment as a share of GDP looks respectable, but overall investment (not shown here) lags behind most overseas competition, and spending on research and development has been consistently low.
In manufacturing, Britain also lacks large numbers of small, high value-added companies, compared with France and Germany.
While this shows Britain’s strength in the service industries, it makes it more difficult for smaller manufacturers to attract investment funds than in France or Germany, where small manufacturing companies are the dominant sector.