Productivity Policy Review
Client: Economic and Social Research Council
SQW is one of the partners involved in the ESRC-funded Productivity Insights Network (PIN). PIN is a network, led by the University of Sheffield, which aims to change the tone of the productivity debate in theory and practice. As part of PIN, we have undertaken a review of productivity policy over the last 20 years, with a focus on the overall narrative as well as policy domains relating to regional development, business support, innovation and skills. Our review is available here, and you can read our blog here.
Our review found that productivity policy has waxed and waned, with three distinct periods identified, aligning with significant changes in the political and economic landscape:
- An explicit focus on productivity existed in the 2000s with the five drivers framework (investment, innovation, skills, enterprise and competition) aligned with the national and regional agenda of the government.
- There was a hiatus in productivity as an overarching policy objective from around 2010 until 2015, reflecting the focus on other issues such as public finances.
- An explicit productivity framework re-emerged from 2015 culminating in the recent Industrial Strategy, which established the five foundations framework (ideas, people, infrastructure, business environment and places).
Policy churn within domains has been commonplace, in some cases reflecting changing nomenclature, and in other cases signifying shifts in focus. Given the long-term challenge in addressing the productivity puzzle, some of this churn is likely to be damaging. Our review identifies avenues for further research and areas where there may be lessons for the current policy context.