The creation of a new £23 billion National Productivity Fund in the Autumn Statement is an important step towards tackling the UK’s productivity puzzle, but urgent action is required as the economy braces itself for Brexit, according to ACCA (the Association of Chartered Certified Accountants).
John Williams, head of ACCA UK, says that while government action on productivity is welcome, it would be a mistake to think the Fund should be spent only on ‘tarmac and telecoms’.
The productivity gap in the UK means that the average British worker produces in a week what a French or German worker produces in four days. Yet while the temptation can be to look at the strong manufacturing base of those economies and look to emulate that, we should recognise that the UK is a world-leader as a service and knowledge economy.
That means that while it is welcome that the Chancellor is pledging an overhaul of the nation’s struggling infrastructure, we also have to think big in terms of innovation which will benefit our existing strengths
When you look at the potential impact of vertical cloud computing or predictive analytics, for instance, you can envisage how industries could be transformed through radical efficiency savings which create time for added value, highly productive activities
John Williams says that this means that government needs to focus on building digital skills as well as infrastructure,
Education is going to be vital to ensure that British workers are equipped with digital skills to compete in a global workplace where technology is playing an increasingly disruptive role.
This requires both long-term investments such as continuing to support vocational training through initiatives such as the Apprenticeships Levy, but it also means being willing to invest in training programmes for existing workers so those gains can be gained in the short-term
In ACCA’s own Generation Next global survey of under-36s working in finance, 84per cent saw the possibility of technology creating opportunity for higher value work, even if they could see the risks to low-level jobs.
The finance professionals of the future are ambitious about the role of technology in boosting productivity, and the government needs to recognise and support that as soon as possible
John Williams adds that the intention for the UK to leave the European Union by 2019 means that tackling the national productivity puzzle is now an urgent priority
The costs of Brexit to the UK economy are more profound than adding extra tariffs to exports or limiting the access of British business to the world’s largest trading bloc.
The prospect of greater immigration limits and increased barriers to cross-national collaboration poses severe risks to some of the UK’s most dynamic and productive industries, from finance to technology. Already we have seen the likes of Berlin, Paris and Dublin make overtures for London’s thriving FinTech sector
The UK is in a strong position to compete globally in these sectors, whether in our out of the EU, but we have to start taking urgent action now to tackle the problems of productivity – and hopefully the National Productivity Fund will mark the beginning of a new serious approach to this long-running problem
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