15 Years of Declining Productivity: Jamie Ollivere Calls for Government Action and Investment

02nd Jul 2024

As we approach election day on July 4, I find myself reflecting on the past 15 years in the world of business growth and support. This period has been marked by a troubling decline in productivity, closely tied to decreased investment. Given the critical point our country is at, I felt it was an opportunity to share my insights and thoughts on what we need moving forward to ensure the UK reaches its full potential.

In 2008 the financial sector crashed and along with it, the UKs productivity performance and its been stuck there ever since. Productivity performance collapsing alongside the flow of finance is no coincidence, the two are inextricably linked. They operate implicitly , investment demands productivity and productivity demands investment. The financial crash broke this dynamic leading to underinvestment in areas such as skills development, infrastructure, technology, R and D and international trade, all of which we know support productivity performance - and therefore the conditions for improved productivity performance are far from optimum at the moment.

So we need to do something about it. I appreciate that we’ve had a far from stable environment to work with -  the credit crunch, EU Exit, COVID-19, climate change, geopolitical tensions have definitely not worked in our favour, but this has been  exacerbated by a ‘here today and gone tomorrow’ policy and initiatives that have failed to grasp the effects of the environment in which we are operating.

Our world continues to change and in any time of change,  strong, decisive and united leadership is needed. To build confidence and belief in the ambition of the manifestos we are being presented and the long-term commitments our political parties are making to us - people, businesses and investors need to see that for themselves and see it underpinned by investment that is committed at the right levels and timescales to allow for momentum to build and for change to occur. This should be top of the list for an incoming government should they wish to boost living standards, economic growth and ultimately have a positive impact on people’s lives.

Whoever leads the next government needs to emulate the great leaders of the past and present, a government that can unite people behind a clear and compelling vision and set the investment framework that is fit for purpose, fair and ambitious - that is accessible for everyone to contribute and reap the benefits. Only then will we create the conditions for the enhanced productivity performance and subsequent growth that we know we are capable of.

At RTC we are passionate about the role that businesses play in enabling social mobility, increasing living standards impacting positively on people's lives and raising productivity performance is pivotal. We therefore encourage the next government to:

  • Develop a long term vision for the economy that is embedded in a modern industrial strategy and which harnesses the best of British innovation and talent
  • Incentivise practices that will enhance productivity through fiscal incentives such as extending tax credits beyond R&D to stimulate investment
  • Encourage and incentivise the creation of new, innovative and high-performance businesses - the businesses that we need to shake things up and reset the benchmark.
  • Spread and deepen devolution across the North so all areas are equipped with the long-term funding and power needed to harness their collective capabilities, to, unlock the power of communities and enable the delivery of the UK’s economic vision.
  • Ensure that the UK Shared Prosperity Fund continues to invest at the same level that the EU Structural Funds did, to provide access to the funding needed to support businesses to adopt productivity-enhancing technology and practices. 

It’s RTC’s mission to drive UK competitiveness by supporting more businesses to innovate, compete and grow through working with national and regional governments to unlock, attract and retain investment. We look forward to working with the next government to make the UK the best place to invest, innovate and grow. 


Return to list