This report is the fourth by EEF comparing the UK’s productivity performance with that of its competitors. The first and second reports were respectively based on in-depth interviews with senior managers in the United Kingdom and the United States (‘Lessons from Uncle Sam’) and a large scale survey (‘Catching up with Uncle Sam’).
The same approach has been applied to France and Germany with company interviews resulting in the report ‘Bridging the Continental Divide’, followed by a survey which investigated the issues raised by the interviews. The issues raised in the ‘Uncle Sam’ work such as working practices - lean manufacturing and High Performance Working - remain critical but in this case we focus on the issues of skills, innovation and investment that seem most important in explaining the productivity gap with France and Germany.
This report investigates these issues further, seeking more evidence across a sample of 600 companies in all three countries on what drives and what constrains the performance of manufacturers on each of these factors. The main findings and implications for policy are discussed in the summary, which also identifies the key strengths and weaknesses of UK manufacturing.
Each section of the report starts with a summary of the evidence on the issue, drawing on our survey, previous EEF work and on other published research. It also considers the implications for policy. The rest of each section then looks at the results in detail, breaking them down by company size, sector, country of location and of ownership, and type of firm.
We have now a large body of evidence on which to base our policy prescriptions for further improvement in the performance of UK manufacturing. In addition our report provides more up to date information than other sources, such as the European Union’s Community Innovation Survey, which have become quite dated.
This report offers some indication of what needs to be done to raise our productivity performance but we will be developing further our thinking in the coming months. Currently, there are signs of a better outlook for UK manufacturing with productivity and profitability improving, investment rising from a low base and a range of surveys pointing to expanding order books and output.
Our survey also has some good news stories to tell, particularly about the performance of companies in the transport manufacturing sectors and of medium-sized and larger firms. However, it also suggests that there are important issues to address if we are to see a sustained improvement in manufacturing.
We would value your comments both in the interpretation of the results but also in suggesting future areas of investigation. For example, should some of the responses to this survey be monitored on a regular basis? Alternatively, would it better to widen the analysis to developing areas of competition such as China and other parts of Asia? We have set up an email address to receive your comments. Please email us at productivity@eef.org.uk