CBI lays out plans for £200bn productivity boost

01 December 2016 -

A new report from the Confederation of British Industry reveals how better managed businesses and engagement with the next generation hold the key to solving the regional productivity puzzle

Matt Scott

Unlocking higher regional productivity through better-managed businesses could add £208bn to the UK economy over the next decade, according to the latest CBI research.

While some areas of the UK have benefitted from an uptick in productivity over recent years, too many cities, towns and regions have been left behind, limiting opportunities for millions across the country.

The CBI’s new report, Unlocking Regional Growth, sponsored by solicitors Irwin Mitchell, draws on special access to ONS data to identify four main drivers of regional productivity differences across the UK:

• Educational attainment of young people at 16 and skills;
• Transport links that widen access to labour;
• Improved management practices; and
• Higher proportion of firms that innovate and export.

To help address these regional differences, CBI has put forward a number of solutions to help businesses and policymakers drive growth in the UK’s regions.

Chief among these is the need to improve management practices and simplify the number of business support initiatives, building on the work of the Productivity Leadership Group.

Introducing Unlocking Regional Growth at the Manufacturing Technology Centre in Coventry, CBI director general Carolyn Fairbairn said: “The fact is that some of our regions and nations have been left behind. There is a very real gulf in opportunities between people in different parts of the United Kingdom. Changing this is something that the CBI and I – personally – are passionate about.

“The Productivity Leadership Group, chaired by Sir Charlie Mayfield, has shown that from management, to leadership and innovation, business practices make all the difference. Today people often define firms by their size – big, medium or small. Yet it’s not just about how big companies are, but how they’re run, how they invest in their people and whether they want to grow and expand.”

The CBI report found it is also vital that business and government focus on building the right skills across the UK and producing the best opportunities for our young people.

CMI director of strategy Petra Wilton welcomed the report and said more needed to be made of the business support networks across the county to fully realise the productivity potential of the UK’s regions.

“As this welcome report reveals, investing in better leadership and management practice, and equipping young people leaving school with work-ready skills are two of the main fixes for tackling the national productivity gap,” she said. “Poor management costs the UK £84bn per year and is the primary cause of business failure and preventer of SME growth. As the CBI report shows, the quality of leadership and management skills varies regionally. We’re working with employers to address this through better access to local business support networks to improve their management skills.

“Plus, CMI’s research highlights that it’s luck of the draw on a regional basis whether young people get the necessary chances to gain work-ready skills. We need employers and educators to help the next generations to develop practical skills from a younger age. This includes making management and leadership skills part of the school curriculum.”

CMI’s own Age of Uncertainty research, run in collaboration with the EY Foundation, found that a third of 16- to 21-year-olds in the UK (32%) aren’t confident about finding a job in the next few years, with practical experience and a lack of opportunities a major factor.

To combat this, CMI and the EY Foundation are calling on employers and schools to back a school-to-work syllabus as part of the national curriculum, to give young people fairer access to workplace opportunities and to improve their employability on leaving school. (You can find out more about CMI’s research, here.)

Download the full CBI report, and find out more about unlocking regional productivity gains