What impact will the Covid-19 crisis have on UK productivity and what are the policy implications?
In this video chaired by Professor Graeme Roy, Director of the PrOPEL Hub and Fraser of Allander Institute, Dr Cher Li, Professor Richard Kneller and Dr Stuart McIntyre discuss the outlook for the UK productivity post Covid-19. The panel explore productivity within a UK content, and in particular the ‘UK productivity puzzle.’ They provide insight into the sources of the UK’s productivity challenges and discuss policy solutions to address this, including highlighting the opportunities and challenges the UK faces from the Covid-19 crisis.
Stuart beings by defining productivity within a UK content and discusses the different ways it can be measured. He outlines the difference in productivity levels across regions of the UK, highlighting that while regions such as London and South East have above average productivity, Wales and the North East fall below average.
Discussion focuses on the UK productivity puzzle, i.e. the fact that productivity in the UK has failed to return to pre-2008 levels. Richard outlines three potential explanations for this, namely absence of the right type of industries, low productivity among existing firms and small size and share of more productive firms.
Richard then considered how policy could improve productivity in the UK, for example by making firms more productive through the creation and adoption of new technology, better management practice and efficient use of technologies. He calls for an increase in opportunity and financial support to allow more productive firms to enter the market, survive and grow.
Cher explores the main drivers of productivity and highlights management practice, technology adoption and roles of standards as key.
She then considers opportunities and challenges arising from the Covid-19 pandemic and potential implications for productivity in the UK. She stresses the potential of the Covid-19 crisis to accelerate firms’ adoption of new technologies and to act as a tipping point towards digitalised globalisation.
Cher finishes by outlining the different post Covid-19 growth scenarios and the need for policies to support a productivity rebound while addressing the distributional concerns.
The panel explore the economic impacts arising from the COVID-19 crisis in more detail, reflecting on regional variation and measurement of productivity within this context.