Bank of England governor Mark Carney leads the conversation
The governor of the Bank of England, Mark Carney, has chaired a meeting of UK business leaders who have announced a new set of commitments to help UK firms improve their productivity.
As the countdown to Brexit begins, Be the Business – the campaign organisation formed to tackle the UK’s longstanding productivity challenge – met with the governor to set out plans to make the UK more productive and competitive. Attendees included the leaders of Amazon, BAE Systems, the British Museum, BT, CBI, Cisco, EY, KPMG, the John Lewis Partnership, McKinsey & Co, Rolls-Royce and Siemens UK.
UK productivity grew by 0.9 per cent in Q3 and 0.7 per cent in Q4 of 2017. While positive, this follows a decade of under-performance and Britain remains 25 per cent less productive than Germany. In its latest inflation report, the Bank of England highlighted poor productivity growth as a key factor limiting the UK’s capacity to grow to around 1.5 per cent per year.
That’s why some of the UK’s leading businesses have committed to bringing world-class management and technology practices to thousands of British businesses in their communities and supply chains. This includes:
- Support for a national digital platform, launched today, giving businesses best in class advice on how to improve
- A new mentoring programme, launching nationwide later this year, to help SMEs build essential management skills – supported by senior staff from companies including GSK, the John Lewis Partnership and Siemens
- The national roll-out of Productivity through People – an executive education programme for SME leaders
- A new business productivity index and a series of tailored programmes targeted specifically at SME productivity
The Bank of England has been at the forefront of highlighting the need for UK firms to improve their productivity. In March 2017, the organisation’s chief economist Andy Haldane warned that technological diffusion from business “leaders to laggards” has slowed. This message was echoed by chancellor Philip Hammond, who announced a call for evidence in the Spring Statement to understand how to best help the UK’s least productive businesses to learn from, and catch-up with, the most productive.
At the meeting, held on 9 April 2018, Carney said: “UK productivity has severely under-performed since the financial crisis, resulting in a lost decade for real incomes and a lower speed limit for the economy. Reviving productivity growth is critical for the UK’s long-term economic prosperity, and part of the answer lies in spreading best practice across a much wider range of firms. Be the Business are playing a key role in achieving that, helping businesses to identify and implement ways to improve their productivity.”
Also attending the meeting was Charlie Mayfield, chairman of the John Lewis Partnership and Be the Business, who commented: “Getting our businesses to improve their performance to the same level as our international competitors is the biggest economic challenge we face as a country. The UK’s businesses have the solution in their grasp. That’s why we’re building a movement that will recruit tens of thousands of companies across the UK to ensure we’re match fit to compete post-Brexit.”
Notes to editors
Be the Business is a new business-led organisation created to close the UK’s productivity gap. Chaired by Charlie Mayfield, chairman of the John Lewis Partnership, Be the Business is spearheading a business-led drive to help companies across the UK improve their performance.
It is supported by some of the UK’s most senior business leaders including Tera Allas (McKinsey & Co), Olly Benzecry (Accenture), Sir Roger Carr (BAE Systems), Roger Connor (GSK), Ian Davis (Rolls-Royce), Carolyn Fairbairn (CBI), Doug Gurr (Amazon), Dame Fiona Kendrick (Nestle), Sir Richard Lambert (British Museum), Prof Juergen Maier (Siemens UK), Sir Charlie Mayfield (John Lewis Partnership), Gavin Patterson (BT Group), Phil Smith (Cisco), James Stewart (KPMG), Steve Varley (EY) and Nigel Whitehead (BAE Systems).
Be the Business’s advisory board members have committed the first 100 mentors to a leading nationwide mentoring programme. Be the Business will report on the programme roll-out at its next advisory board meeting, to be hosted by the chancellor, in September 2018.
Productivity through People is a 12-month regional productivity programme for SME leaders. Initially launched by BAE Systems and the University of Lancaster in January 2017, participants undertake a series of masterclasses, led by the leading business school faculty and industrial visits to some of the UK’s leading businesses, alongside tailored mentoring. Programmes are currently underway in Lancaster, Bath and Glasgow, and a national roll-out is in development for 2019.
Office for National Statistics, Labour productivity, UK: October to December 2017:
Productivity puzzles, speech given by Andrew Haldane, chief economist at the Bank of England, at the London School of Economics on 20 March 2017: