UK productivity and policy
Despite a reversal of the trend of a century of low productivity from 1997 up to the financial crisis, UK growth has lagged far behind the US and its European comparators. Even after recovery from the 2008 crisis, productivity has flatlined at pre-crisis levels despite full employment.
We look to the cause of this "productivity puzzle" and combining the programme's 20-year findings on drivers of productivity with evidence from leading experts and stakeholders, set up two Growth Commissions and whose reports lay out policy remedies for sustainable long-term growth.
Our follow-on work on industrial policy explores challenges raised in these reports such as easing and targeting access to investment finance to innovative SMEs, reducing the tail of poorly performing firms by improving management practices, and improving universities' commercialisation of research and the diffusion of existing technologies.
While causes of the weakness of UK productivity growth pre-date the shocks of the financial crisis and the Brexit referendum result, the programme has also projected the additional impacts of different Brexit scenarios on the dynamic effects of reductions in productivity, (the trade and fiscal effects are tackled by the Trade programme).
These include decreases in product market competition and loss of benefits of innovation spillovers from multinationals and more productive foreign-owned firms some of which will move operations from the UK.
Video: LSE Growth Commission's report
The UK has failed to invest in key areas needed for long-term growth. How can we change this? John Van Reenen, presents a 'manifesto for growth' for the UK economy over the next 50 years, backed up by the Growth Commission's report. View...
Unlocking SME productivity: Review of recent evidence and implications for the UK’s Industrial Strategy
Improving productivity is one of the main goals of the government's Industrial Strategy. Since the UK is a nation of small and medium-sized enterprises (SMEs), the question arises whether SMEs have a role to play in industrial policy. Read more...
The UK Productivity and Jobs Puzzle: Does the Answer Lie in Labour Market Flexibility
Joao Paulo Pessoa and John Van Reenen argue that "capital shallowing" (the fall in the capital-labour ratio) could be the main reason why GDP per worker fell for five years after 2008 - unprecedented in post war UK history. Read more...
UK productivity and policy publications
Chiara Criscuolo, Ralf Martin, Henry G. Overman and John Van Reenen
1 January 2019
2 October 2018
Philippe Aghion, Terra Allas, Timothy Besley, John Browne, Francesco Caselli, Richard Davies, Richard Lambert, Rachel Lomax, Stephen Machin, G.I.P. Ottaviano, Christopher Pissarides, Isabelle Roland, Xavier Rolet, N Stern and Anna Valero
2 February 2017
Joao Paulo Pessoa and John Van Reenen
5 June 2013
Nitika Bagaria, Dawn Holland and John Van Reenen
3 August 2012
Chiara Criscuolo, Ralf Martin, Henry Overman and John Van Reenen
21 May 2012
Dan Corry, Anna Valero and John Van Reenen
6 December 2011