The UK has some of the world’s most productive businesses and has a strong business environment upon which we can build. Despite this, the UK has a long-standing productivity gap with international competitors. That is why we launched the joint Department for Business, Energy and Industrial Strategy and HM Treasury, business productivity review to understand the decisions and actions taken by businesses that affect their own productivity.
The potential prize is significant. The Bank of England estimates that if UK firms could move along the productivity distribution into the next quartile, then this could see a boost to UK GDP by around £270 billion in today’s prices.
To inform the review we launched a call for evidence in May 2018 and received more than 140 written responses. Meetings were held with 3,000 business leaders and we also engaged with sector trade bodies and membership organisations that jointly represent over 500,000 businesses across the UK, including Scotland, Wales and Northern Ireland.
The business productivity review we are publishing today identifies best practice used by our leading businesses and sets out ten key actions that will support businesses to become more productive these include:
£20 million to strengthen local England peer to peer networks in England focused on business improvement so that thousands of business leaders can share expertise on leadership, business development and technology adoption.
£11 million to create a small business leadership programme in England to provide small business leaders with leadership training, building on existing world-class training programmes: such as Be The Business’ productivity through people, Lancaster University’s LEAD and Goldman Sachs 10,000 small businesses programme.
£25 million through the knowledge transfer partnerships to allow over 200 more UK based businesses per year to access the skills and talent to improve their business performance and productivity by improving how well they are managed. Today we are announcing that there will be a dedicated management KTP round which will be open on 12 December 2019 and closes on 19 February 2020.
Work with trade bodies, sector councils and Be The Business to ensure small businesses have access to business mentors from the UK’s leading and inspiring businesses.
Development of the evidence base on productivity, including through the recently announced productivity institute and the BEIS business support evaluation framework.
Work with the behavioural insights team to improve messaging to businesses, and work with trusted intermediaries—e.g. banks, accountants, trade bodies—to support small businesses to take action.
Improve the customer experience for businesses accessing online Government information and services for growth domestically and internationally.
Work with the private sector, such as Be The Business, to ensure businesses have access to clear advice and the tools they need to help them both understand and improve their productivity.