Guest Blog|Be the Business
You may have read about the UKs ‘productivity puzzle’ in the business pages or heard references to it in the media. This is the phenomenon whereby UK productivity fell significantly in the aftermath of the 2008 financial crisis, but while our peer nations such as USA and Germany quickly recovered, UK productivity has remained stubbornly and frustratingly low.
This productivity stagnation has now lasted for over twelve years, with annual productivity growth rates averaging 0.2% rather than the 2% pre-recession norm. UK productivity growth is now at its lowest level since the early 1820s! This is not the only indicator of poor UK economic performance. Over the past two years the UK has fallen from 6th to 9th in the Global Competitiveness Index. Of the G7 nations, we now place 5th lagging behind USA, Germany, France and Italy in terms of productivity growth. But why should we care about productivity? It is important because it is the critical indicator of how competitive we are as a nation, and growing productivity is the surest way of delivering sustained wage growth and improving standards of living. The ONS estimates that this lost decade of productivity has cost the average UK worker £5,000 per year in lost wages.
Government and the business community recognised that a significant intervention was required to reverse the productivity decline, and in November 2017, Be the Business was launched. Supported by UK government and leading British companies, our strategy for tackling the productivity problem is based on two fundamental insights:1) Good management practices and technology adoption are major drivers of SME performance improvement 2) The UK is home to some of the world’s most productive firms, but the best practices that drive high performance in these companies have not diffused through the wider business community.
Using these two principles, we set about designing and delivering programmes that bring the best practices from leading UK companies to ambitious SMEs. A guiding principle being that the programmes must have a measurable impact on SME performance, profits, and productivity. The programmes are delivered using the expertise of leading UK firms such as Accenture, BAE, Cisco, GSK, Siemens, McKinsey, and Rolls Royce. Every week more business leaders are joining us to help transform UK productivity. These programmes are designed to be practical, focusing on small steps that SMEs can make in their business that will generate real bottom line improvements. Each Be the Business programme is evaluated by a team of economists to measure the positive impact on the participant SMEs. We have seen some impressive results thus far.
How can you begin your business’s productivity journey? The first step is to actually benchmark your business’s productivity against your peers. We have developed an online tool that allows you to input a few basic numbers (revenue, costs, staff) and using official government data, the tool will tell you how productive your business is compared to other UK SMEs of a similar size and sector. It then helps you to break down your performance and identify areas of leadership and management strength and weakness. It then provides you with some practical steps on how you can improve. You can save your results and go back every now and then to reassess and track progress via your dashboard.
We believe the key to productivity improvement is small, actionable steps that can have a big impact on your business. Visit our website to be inspired by others businesses who have taken the first steps towards improving their productivity.
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Be the Business was set up at the end of 2017, with support from the government and some of the nation’s most prominent businesses, to build a movement to transform UK productivity and competitiveness. We are led by business, for business, in the interests of every company and our economy as a whole.
Senior Corporate Affairs Manager - Be the Business