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The Brexit position has become more uncertain and business confidence dropped further, even though the UK is still outperforming other EU nations such as Italy and Germany in terms of growth. This vindicates more than ever the need for a “Lean” approach with businesses more agility in the market place. Unnecessary costs related to business should be removed now, with the emphasis on the word unnecessary. With the advent of Industry 4.0, more investment should be put into efficiencies through technology and mechanisation. Output per worker in the UK has been levelling off. In certain regions of the UK such as EA, unit per worker productivity can  be up to 30% lower than some of their counterparts in certain EU countries such as France & Germany. Overall Inward investment is also reducing, even though there are a few bright spots, which is also limiting the opportunity to improve productivity through mechanisation.

According to the ONS (Office for National Statistics) Output per worker for Q3 2018 was 101.6 with the 100 baseline in 2016. The worrying part is that the curve has been flattening out since 2008. Some UK Companies are investing in new equipment and machine tools, but not at rate where we can maintain an upward trend. The lack of productivity initiative will create an irreparable GDP gap, hindering growth. Even with a change of situation, the historical damage is done so we need to act now.

Machinery is only part of the solution. We need to engage our employees more, as they are the ones that will give us the bandwidth and deliver the results. Leadership bandwidth is governed by worker engagement. We have developed some animated videos illustrating why and how we can get better engagement.

It was interesting to see last week the re-branding of the EEF as MAKE Uk, as a means of raising the status of UK manufacturing. The UK is still the 9th biggest manufacturer in the world. There is still a strong base and we need to build of this, invest and move forward. There is no guarantee that London will remain a key hub for financial services and the barriers to leaving are significantly lower in this sector. Having both a manufacturing and technology based economy will be the bedrock. When these sectors come together you get disruption, and the UK needs to be the head of this disruption.

A focus on productivity will create jobs, as it will drive growth.

Getting Clearer on Productivity

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