Tuesday, 15 May 2018

We need to look beyond the shiny tech sector to solve the productivity puzzle.

We have record levels of employment and yet the UK lags behind Europe and much of the rest of the world in productivity.

When it comes to addressing the conundrum of why British workers produce less than their French and German counterparts the default setting of most politicians is to talk about technology as the solution. Partly, you suspect, because they like being photographed with the latest piece of space age kit almost as much as they do bring snapped walking around a hospital.

A year long research project carried out by the Joseph Rowntree Foundation (JRF) suggests we should be looking elsewhere. The real productivity problem lies with low waged sectors like hospitality and retail.

This isn’t a reflection on a lack of investment or any deficiency in the skills of workers. It is a result of how staff are used and the problem that has dogged British industry for decades; poor management.

Low productivity, described in an editorial written for Prospect magazine by Rain Newton Smith and Ashwin Kumar as the ‘most intractable problem’ faced by the UK doesn’t just hit the profits of corporations, it drives down wages and living standards too.

Government responses, they write, has tended to focus on the ‘shiny and new frontier firms' at the economy’s cutting edge. Important stuff no doubt, but it misses the point.

There are and always will be more people doing, allegedly, mundane jobs than brilliant innovators. A balanced economy with a sense of purpose values both because both are necessary.

A few companies, Newton Smith and Kumar cite cosmetics retailer Lush and the nation’s favourite pie seller Gregg’s, as examples of employers who are working to ‘improve staff skills and wages, keeping them motivated and adding value to each store.

The majority though take the fork in the road marked ‘Taylorism’ with its relentless micromanagement and deadening imperatives to make humans act like robots. This, as our flat lining national productivity shows, hasn’t been a success; more to the point any limited benefits gained haven’t been shared with workers.

This is a reprise of an old, old story in British industry, frantic and frankly pointless bean counting on a voyage to the narrowest of horizons. Having been cut out of the loop when it comes from profiting from working harder you wonder not so much at employees being demotivated so much as that they continue to make anything more than a token effort.

The JRF recommend that any future interventions aimed at improving productivity must benefit workers as well as their capital owning bosses. They also call for better management practices and less use of casual labour.

It has taken a Conservative Party constitutionally disposed to think having an industrial strategy is the first step towards Communism an age to come around to the idea that the UK needs one.

Now they have with the shadow of Brexit hanging over the economy it needs to be written with the findings published by the JRF in mind. If that doesn’t happen we risk slipping into an economic backwater and a dangerous political crisis.

No comments:

Post a Comment