Productivity of UK businesses is set to be supercharged with £88m in new government investment announced today.
Levels of productivity across certain sectors in UK manufacturing, like aerospace, are among the highest in Europe, but overall UK productivity still lags behind major global economies and certain sectors, including chemicals and textiles, find it harder to grow.
By adopting new technologies and more efficient business practices, the productivity of businesses, particularly small ones, could be increased. This will help them to scale up and expand into new markets – boosting competition and ultimately benefiting consumers with lower prices or better quality products and services.
£43m in government investment will support top researchers and analysts to explore how to turbocharge UK productivity levels through a new ambitious productivity institute; tackling barriers such as productivity imbalances between sectors and regions, poor management practices and skills investment.
Experts will work closely with businesses to power the UK towards a more competitive and resilient economy, as well as the public sector and policymakers, aiming to deliver benefits for both businesses and consumers. Increased productivity can drive up wages, lower prices of products and improve working conditions.
The announcement comes as ministers visit new infrastructure projects across the country to highlight government investment in connectivity. Infrastructure is one of the five foundations of productivity highlighted in the Industrial Strategy and the Prime Minister has been clear that this government will level up infrastructure across the country with new road and rail investment and full fibre broadband.
Business Secretary Andrea Leadsom said: “Productivity matters – if we produce more, we can earn more, as individuals and as a society. Today’s investment will allow us to develop pioneering software to harness the power of supercomputers and create a state-of-the-art Productivity Institute.”
A further £45m will be specifically invested by the government into the development of cutting-edge supercomputer software, set to transform whole sectors from agriculture and advanced aerospace to Formula One and pharmaceuticals with hyper-accurate weather predictions – helping them plan come rain or shine and in turn boost their productivity.