Let's Make 2017 The Year The UK Cracks The Productivity Puzzle

It's that time of year for making resolutions: when, having staggered over the Christmas finishing line, we vow to come back to the office with more zest, ambition and productivity than before. For some of us those resolutions will fizzle out before the end of January - less cynically, however, we should remember that for many those promises will yield life-altering changes for the better.
Gareth Fuller/PA Wire

It's that time of year for making resolutions: when, having staggered over the Christmas finishing line, we vow to come back to the office with more zest, ambition and productivity than before. For some of us those resolutions will fizzle out before the end of January - less cynically, however, we should remember that for many those promises will yield life-altering changes for the better.

In 2017, as the UK economy enters possibly its most decisive period since the end of the Second World War, here's hoping that the national mood to return more productive than ever falls into the latter camp. Following on from the Autumn Statement, many economic observers will be quietly hoping that the creation of a new £23bn National Productivity Fund becomes a significant land-mark for the future of UK business.

The UK's 'productivity puzzle' has become a notorious head-scratcher for economists and policy-makers where, despite the world-class strength of many British industries, our output per worker lags behind France and Germany by a ratio for 5:4. That has been viewed as a major problem even viewing those nations as a trading partner; as potential rivals it should offer a sobering prospect.

Fortunately, the UK's success in financial services, technology and creative industries indicate the problem is not terminal. In fact, the key to solving the problem has always been in acknowledging that our economy's strength is in services, rather than manufacturing, where the productivity gains are harder to divine than more efficient machinery.

That is not to say technology won't play a key role: innovations in predictive analytics and vertical cloud computing have the ability to revolutionise even our world-leading industries. The promise of the National Productivity Fund to invest in fresh infrastructure, from 5G telecoms to the M4 relief road, are welcome acknowledgements of the need for Government to show leadership in supporting business capacity.

Yet the question of raising productivity is people-centred. The temptation in this discussion is to view technology as a political headache as much as a solution: taking jobs even as it creates growth. Yet this is a dangerously narrow, short-termist view.

More than that, it doesn't reflect the concerns of the worker of the future. At ACCA (the Association of Chartered Certified Accountants), we have just completed a major global survey of Generation Next: those finance professionals aged 36 and under who know they will spend their careers competing with a new generation of super-intelligent machines. They are not oblivious to the risks to their jobs: almost 3/5 expect automation to replace many junior level positions in the near future. But they are also confident in their ability to bring something greater to the table - 84% believe that the impact of new technology will be to liberate them to focus on higher value-added activity.

That should offer reasons to be cheerful for government and employers alike. What will be essential to increasing productivity in the short and long term will be education: investing in and supporting the skills which will enable workers to thrive in what many call 'the Second Machine Age.' Continued support of initiatives such as the Apprenticeships Levy - enabling wider access to the professions as well as inculcating work-ready skills as early as possible - are steps towards that goal, but we should not discount the benefits of continuing professional development for contemporary workers.

The next few years, geared around Brexit negotiations, offer many potential costs and challenges to the economy. Yet while predictions are dangerous in an ever-changing world, tackling the productivity puzzle will provide a certain bet towards improving the health of the UK economy for many years to come.

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