Business Productivity Review will help UK business embrace new technology to unlock £100 billion boost to wages, profits and productivity

This review will help better understand the factors affecting the productivity of UK business in a bid to unlock £100 billion of untapped benefit to our economy. 

In a bid to increase productivity and with it the nation’s wages and profits, Chancellor Philip Hammond yesterday (Tuesday 22 May) announced a Call for Evidence on the UK’s productivity, seeking views on how to boost the performance of Britain’s businesses.

The Business Productivity Review will focus on how firms across the country can take advantage of leading technologies, management practices and business support services. Increasing productivity leads to a long-term boost to workers’ wages and businesses’ profits – a key part of the government’s modern Industrial Strategy.

Through the Industrial Strategy, the government is building upon the UK’s position as one of the best places in the world to start and grown a business. Around 1,100 businesses start every day in Britain. However, UK productivity is below the average for the rest of the G7 advanced economies. Productivity is frequently defined as output per worker, or alternatively output per hour worked.

Research from the CBI suggests that the UK economy could receive a £100 billion boost and see a 5% reduction in income inequality, by encouraging more businesses to adopt the best tried and tested technologies available – such as:

• cloud computing,
• mobile technology and
• e-purchasing

Acknowledging the UK’s significant economic strengths, the Chancellor told the Confederation of British Industry (CBI) today that we can do more to make the most of our untapped potential.

Business Secretary Greg Clark said:

For centuries Britain has been a nation of discoveries, but these ideas haven’t always been commercialised in the UK and new ideas applied in practice.

Now our modern Industrial Strategy is ensuring that firms across the UK can take advantage of leading technologies and management practices, potentially adding £100 billion to the economy and boosting people’s earning power right across the country.

The Chancellor also announced £20 million government investment for the Made Smarter pilot scheme aimed at boosting productivity and growth in the north west.

The industry-led pilot will help up to 3,000 small and medium-sized manufacturers become more competitive through greater use of digital technology in the manufacturing process and in supply chains.

Made Smarter is another way the government is building a Northern Powerhouse and is the first initiative of the Made Smarter Commission that was launched by the Business Secretary in February as part of the Industrial Strategy following Juergen Maier’s independent review of digital technology in the UK manufacturing sector.

To address the UK’s productivity challenge, the government’s Industrial Strategy focuses on the 5 foundations of productivity: ideas, people, infrastructure, business environment and place. As part of our approach to improving the business environment, the Industrial Strategy white paper announced that the government would launch a review of the actions that could be most effective in improving the productivity and growth of small and medium-sized businesses.

The UK has a strong business environment upon which we can build:

1,100 businesses start every day in Britain and we are ranked as one of the best places in the world to start and grow a business

we have more than 31,000 Scale Up businesses

between 2012 and 2016 London attracted more tech investment than Paris, Berlin and Amsterdam combined.