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UK Economy - Policy Focus - Labour Productivity

A-Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 27 Mar 2023

In this short revision video we examine policies that might be effective in improving productivity in the UK economy.

UK Economy - Policy Focus - Productivity

There are a number of reasons why labour productivity growth has been weak in the UK economy. Some of these reasons include:

  • Low investment in research and development: The UK invests a relatively low amount in research and development, which can lead to slower innovation and productivity growth.
  • Low levels of education and skills: The UK has a relatively low level of education and skills among its workforce, which can also lead to slower productivity growth.
  • Weak infrastructure: The UK has a relatively weak infrastructure, such as roads, bridges, and airports. This can make it difficult for businesses to transport goods and services, which can also lead to slower productivity growth.
  • High levels of inequality: The UK has a relatively high level of inequality, which can lead to lower productivity growth. When people are not able to access education, healthcare, and other essential services, they are less productive.

Data from the Office for National Statistics shows that labor productivity growth in the UK has been weak in recent years. For example, between 2008 and 2017, labor productivity growth averaged just 0.4% per year. This is well below the average of 2.1% per year for the G7 countries.

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