LONDON, Feb 23 (Reuters) - British corporate sectors that once drove national productivity growth have fallen behind the global leaders and the government's strategy for improvement must be hard-edged
BCG: UK Must Get Tough to Reverse a Prolonged Productivity Decline
BCG’s Call for a Tougher UK Productivity Strategy
LONDON, Feb 23 (Reuters) - British corporate sectors that once drove national productivity growth have fallen behind the global leaders and the government's strategy for improvement must be hard-edged, the Boston Consulting Group, a consultancy, said on Monday.
Shifting Workers to High-Growth Areas
Encouraging 'Creative Destruction'
Policymakers should encourage "creative destruction" of firms that are barely surviving and help workers to move to higher-growth areas, BCG said in a report.
Government Plans Under Keir Starmer
Successive British governments have sought to fix the country's weak productivity record. Prime Minister Keir Starmer has promised to reform planning rules and invest more in infrastructure.
Key Points from the BCG Report
BCG said in its report:
* Businesses in manufacturing, information andcommunications and financial services accounted for 84% ofpositive productivity growth in Britain between 1997 and 2007,but only 34% in 2019-2024 * The UK's industrial strategy should be focused onsuccessful areas, have "hard edges and be relentlessly focused,rather than trying to lift growth for all sectors" * The weakest firms now produce less per worker than theydid 30 years ago, after adjusting for inflation * The financial services sector has seen little improvementsince the global financial crisis almost two decades ago * Reforms that lower energy prices would help manufacturing * Specific help for IT and communications firms should be inareas such as training, digital skills and innovationWriting by William Schomberg
(Writing by William Schomberg)
