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The UK's productivity challenge is 'an issue of pressing public policy concern'. Since the 2008 financial crisis, the UK has suffered a systematic and sustained flatlining of its productivity growth across all measures, more so than similar countries. This gap between the UK's expected pre-crisis trend and its actual productivity growth constitutes the UK's 'productivity puzzle'.
Following the COIVD-19 pandemic, understanding the causes of the UK's productivity puzzle and formulating solutions to reverse the UK's flatlining productivity, has become a major priority for the government's plans to 'build back better' even while the impacts of the pandemic on the UK's productivity are still working their way through the economy.
The Productivity Institute Programme was established in 2019 by the Economic and Social Research Council (ESRC), through an investment of £40 million from the UK Research and Innovation's (UKRI) Strategic Priorities Fund, to address the UK's productivity challenges. As the ESRC's largest single funding investment, the programme aims, over 5 years, to:
The programme is implemented through three main investment streams: The Productivity Institute (TPI), receiving £32 million in funding to deliver a research hub to advance understanding of the UK's productivity challenge, through a UK-wide network housed in the Alliance Manchester Business School; The Programme on Innovation and Diffusion (POID), based in the London School of Economics and Political Science (LSE), focused on producing cutting-edge research on how to enable the diffusion of innovative ideas and technologies across the UK's economy to boost productivity growth; and a set of seven thematic investments which have recently been awarded.
The ESRC have commissioned RAND Europe and Frontier Economics to conduct an evaluation to assess the impact of the programme on a) improving understanding of the productivity challenge in the UK and b) developing policy and practical innovations to address it. The insights generated by this evaluation will inform ESRC’s governance and management of the investment, and will inform future research investment priorities and strategy relating to productivity and more widely. The evaluation will also inform ongoing delivery of the programme as insights will be delivered in an iterative fashion.
This first phase of research involves understanding the baseline situation regarding productivity research, and its impacts on policy and business, at the programme’s inception. This provides a useful comparison point for programme performance. We established the baseline quantitatively and qualitatively. Methodologies include interviews, targeted reviews of academic and grey literature, reviews of internal ESRC documentation, reviews of Web of Science (WoS) and scopus, analyses of Gateway to Research (GtR) data on productivity research projects started prior to the programme and finally, desk research of parallel productivity research investments in the UK.
Pamina Smith
