The UK lags behind most advanced economies in terms of the productivity of its firms. There are also significant inter-regional differences in productivity across the UK, which are an important component of overall poor performance. The UK is also one of the most unequal countries, compared to other industrialised competitors, in terms of regional differences in incomes and lifetime opportunities. These two challenges are intimately connected: productivity and skills are linked to low-income employment and poorer households in a cycle that needs to be better-understood and directly addressed by policymakers.
In response to these challenges, we are proud to launch a new report, summarising our key survey findings on regional productivity differences, skills and inclusive growth.
The report outlines key findings from a survey of 300 firms in the West Midlands region, across the business professional and financial services; advanced manufacturing; retail; and hospitality sectors. The survey involved a 25-minute telephone interview, undertaken on behalf of the project team by IFF Research. The broad topics we covered in the survey were: (1) firmographics; (2) occupational structure; (3) productivity indicators; (4) skills – current structure, current constraints; (5) innovation; and (6) local embeddedness.
The central aim of the overall project is to identify local factors that underlie and explain regional differences in productivity, with a particular focus on mismatches between the supply of and demand for specific skills. Additionally, it considers key trade-offs between productivity improvement and inclusive growth goals. The City-REDI team aims to do this by addressing the following research aims:
- Investigate how features of regional labour markets, especially skills, act as productivity constraints at the firm level, across different business functions and industry sectors.
- Examine the specific misalignments at the regional level between the supply of and demand for particular kinds of labour/ skills
- Examine the motivations and outcomes of decisions about investment in skills and other factors and how these can stimulate improvements in productivity and – ideally – inclusive growth.
The ESRC funded project research builds on the previous research for the Productivity Insights Network by Professor Anne Green and George Bramley, as well as research for the Joseph Rowntree Foundation, by Professor Anne Green and Dr Amir Qamar, work with Dr Paul Sissons and Dr Kevin Broughton (Coventry University) on Raising productivity in low-wage sectors and reducing poverty.
It also connects well with the LIPSIT (‘Local Institutions, Productivity, Sustainability and Inclusivity Trade-offs’) project, led by Professor Simon Collinson and Dr Charlotte Hoole, alongside a highly interdisciplinary and experienced team of researchers from the University of Surrey, Cardiff University, University of Warwick and Demos. Funded by the ESRC, this project will investigate the role local institutions have in managing the trade-offs that emerge when trying to grow regional economies in an inclusive and sustainable way. These trade-offs are between three objectives which form the basis for targets in Local Economic Plans and Industrial Strategies in the UK. Anne Green is also involved in an ESRC funded project entitled ‘Productivity from Below: Addressing the Productivity Challenges of Microbusinesses’ led by Professor Monder Ram at Aston University and a team of researchers there and at the University of Warwick.
The opinions presented here belong to the author rather than the University of Birmingham.
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