It seems that we’re hearing only one message from politicians about UK productivity – George Osborne says Britain has to “raise its game” while Jeremy Corbyn looks to “cultivating a robust, productive economy”.
The OECD are not impressed, but we believe that there is another, faster way to address the problem, a way that harnesses the data that most companies already have at their disposal.
The UK lagging behind
If we look at the complicated graph (courtesy of the FT) we can ignore most of it, but one thing is clear, everyone’s productivity growth is better than the UK.
UK productivity growth has lagged other countries since 2007
Happily, much of the ‘theoretical’ solution has been agreed on – it’s all about investment. The moment should be right – we have revenue growth (to invest), low interest rates and firms are hanging on to people rather than letting them go. Perhaps the mood music of austerity is damping the instincts to invest – but that aside… why are we not seeing an improvement?
A lack of innovation and discovery
Many say, and we agree, that there is a lack of “innovation and discovery” The Parliamentary briefing gives an overview. We observe however that ‘lack of innovation’ is not something confined to ‘product’ or ‘process’.
We also see a severe lack of innovation when developing business strategy – and a particular resistance to change in the HR strategies of the people-heavy service sector. The noted failure to invest in training, adapting recruitment and people more broadly is down to a widely held belief that it takes years to see the change. We have consistently shown this to be a damaging and false belief – smart, rapid and impactful change can be found in all businesses from smart use of data analytics.
A clear opportunity to innovate with existing data
Our solution is to use what you have, but to innovate ruthlessly. Especially with information that you already own.
We have shown that in terms of productivity through people, innovative use of analytics is a real game-changer:
- the ability to tailor strategies that can make a difference in months, not years,
- tight management control: clarity on what should be done, and exactly where to focus (function, locality, level)
- offer a clear investment decision, with well described outcomes that can be monitored in more or less real time
- information from ongoing analytics that can reshape strategy if it is seen to fail – or improve even more where successes are found to be replicable.
Its time to evolve and move forward
So if the graph below represents the current impact of the information revolution it seems business leaders fall into two camps: … those who use the data they already have to drive their businesses forward … and those hanging on to archaic disciplines and might as well go back to the slide rule. Sadly, for UK productivity – and the businesses themselves – the first group are still very much in the enlightened minority.
Source: Whole Economy GDP per hour worked, seasonally adjusted (2011=100). ONS Statistical Bulletin, Labour Productivity, Q3 2014, downloaded 6 February 2015.
The author Stuart Astill is Chief Economist at Simply Get Results