The Organisation of Productivity : Re-thinking Skills and Work Organisation

Government policy emphasises five ‘drivers’ of productivity: competition, enterprise, innovation, investment and skillsand each of these has been the subject of major programmes of reform (HM Treasury, 2006). Despite this, andnotwithstanding some improvement, UK productivity in terms of output per hour worked continues to lag theperformance of other major economies, most notably France, Germany and the US.This report outlines this ‘productivity paradox’ and addresses why UK productivity performance continues to disappointdespite major changes over the past twenty five years. Our core argument is that, while Government policy stressestwo aspects of context (macro-economic management and the regulatory environment), the key to productivityremains what happens inside the firm and this is something of a ‘black box’. The further benefits that may be achievedfrom pulling levers that impact on the inputs to, and context of, operation are limited. The priority now is to link theexternal (macro) to the internal (micro) in a more coherent effort to support firms. The report focuses on two areasthat are central to how inputs to firms are combined and utilised: skills and work organisation...