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Productivity and Business Policies

Author

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  • Isabelle Roland
  • Anna Valero

Abstract

UK productivity stagnated after the Great Recession of 2008-09 and remains about 15 percent below historical trends. This 'productivity puzzle' is due to a mixture of cyclical and structural effects - the fall is not entirely permanent; and has led to a widening of the longstanding gap with other countries. UK GDP per hour is now about 17 percent below the G7 average. Chronically low investment especially in infrastructure and innovation, poor management and weak intermediate skills can explain this. Government policy on tax, regulation, business support and funding for science and research can create help businesses invest and become more productive. The main parties emphasise the importance of a long term framework for investment and innovation, with a focus on support for small firms (particularly in accessing finance and expertise), key sectors and technologies. Some differences are emerging on corporate tax, regulation and corporate governance.

Suggested Citation

  • Isabelle Roland & Anna Valero, 2015. "Productivity and Business Policies," CEP Election Analysis Papers 021, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepeap:021
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    File URL: https://cep.lse.ac.uk/pubs/download/ea021.pdf
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    Cited by:

    1. Overman, Henry G., 2018. "Uneven economic development and its implications for policy: lessons from the UK," LSE Research Online Documents on Economics 100833, London School of Economics and Political Science, LSE Library.
    2. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain: an atlas," CentrePiece - The magazine for economic performance 513, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    R&D; productivity; Great Recession; government economic policy; austerity; business; management; UK economic performance;
    All these keywords.

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