“A missed opportunity”: CMI’s verdict on the government’s Industrial Strategy

27 November 2017 -

More needs to be done to emphasise the link between good management and national productivity, says CMI

Matt Scott

The government’s Industrial Strategy, published today, announces a range of initiatives but has left many underwhelmed on the key issue of developing the management capability to address Britain’s poor productivity. 

The white paper, building on the Budget announced last week by Chancellor Philip Hammond, recognises the Bank of England’s assessment that improved management and leadership is a key factor in boosting productivity; it acknowledges that poor management skills could account for a quarter of the productivity gap between the UK and the US. However, it will do little to boost investment in management development.

 “The Industrial Strategy is a missed opportunity to correct one of the biggest drains on UK productivity – poor management and leadership skills,” said CMI director of strategy Petra Wilton. “Buried in the white paper is the Bank of England’s damning assessment that management skills account for a quarter of the productivity gap between the UK and US."

Wilton did, however, pledge to support the ongoing work of the Productivity Leadership Group and its ‘Be the Business’ initiatives that are working to close the productivity gap between the UK and other leading nations.

"The strategy recognises the role that the Productivity Leadership Group and its ‘Be the Business’ initiative can have in helping businesses to benchmark their productivity, and then access and share best management practices. We look forward to supporting this work to help the professional development of managers and leaders to gain the world-class skills we need to help us to become a global powerhouse.”

More to be done on apprenticeships

While CMI did welcome the increased funding for apprenticeships that is included in the white paper, Wilton said the government’s Industrial Strategy still did not go far enough in linking improved management skills with better productivity.

"We welcome the strategy’s plan to champion apprenticeships, and in particular the announcement of new funding of £60m to support apprenticeship take-up by young people and poorer families from disadvantaged areas,” she said. “Yet, as a vital UK-wide vehicle for employer investment in skills, it is disappointing that apprenticeships are not explicitly recognised as a key route for driving up productivity.

“Already employers are seeing the value of the new degree-level management programmes to meet the critical gaps in management skills, and government could do far more to leverage this investment as part of its Industrial Strategy.”

Find out how Apprenticeships can help your business improve its management performance and boost productivity, here