British Productivity

The explanation used to be that British manufacturing was unwilling to invest in plant and equipment so could not produce as much as other countries, even though some industries, like car manufacture were competitive, but manufacturing now only accounts for 25% of the economy.

I think it is because, politically, we are going along the US route of depending entirely on markets, with low taxes, low pay and, as a result, have low skills and, frequently, an unmotivated work force.

I am not routing for any particular political party, but compared with other EU countries our taxes are lower, our education is poorer and far more expensive to the person being educated (university fees). The employee is less protected when in work ( I do not mean HSE) and, therefore less valued.

In countries like Germany there are many more family owned small and medium sized businesses (SMEs) where the senior management are part of the business process and do not milk their businesses for huge salaries, which seems to be the norm in the UK.

I would imagine there are a number of reasons which vary from sector to sector.
In work benefits means employers don't feel as much pressure to increase wages?
Companies did not make their most unproductive people unemployed during the recession?
The very low interest rates means cheap borrowing and so pretty unproductive companies have been able to keep going?
Fewer people are working in highly productive market sectors and more are working in low ones? All those ex-bankers running coffee shops maybe?

I have no idea how, for example, they measure the 'productivity' of the public sector. It's easy if you're making something, but how is the productivity of a teacher measured? In the private sector, service companies could simply increase productivity by increasing fees, which may or may not be a bad thing. How do you increase the 'productivity' of someone working for their local council & would you want to, once you know how it's calculated?

It's a tough question!

I have no idea how they measure the various industries etc but it has been said for years that the UK is less productive than their counterparts in the EU etc. I cannot recall ever seeing an explanation for this.

Relatively low productivity is generally down to low investment.

So
Low investment in skills training
Low investment in renewing machinery etc
Low investment in management training, especially where management is poor.
The U.K. has always suffered to a greater or lesser extent in low investment for long term future gain, quick profits have taken precedence.

Public sector is not measured the same way as private sector, and neither can it be as generally other qualities are seen as important.

whitewave I completely agree with you and would add low taxation and, as a result poor public services.

The other country with poor productivity is the US, and that is the country whose business model is so much admired by the right.