White Paper

Creating the right work environment to improve knowledge worker productivity

Although it is still a hotly debated topic and the subject of regular new research, we have had compelling and overwhelming evidence of the link between the workplace and productivity for many years.

One of the most enduring challenges that has faced the UK has been its shortfall in productivity compared to other countries. Understandably, solving the problem has been an obsession of British commerce and governments for many years. Yet little progress has been made.

By the economic definition of productivity, GDP per hours worked, we have lower productivity than the average of all six of the EU’s major economies and in the time a British worker contributes £1 to the economy, a German worker adds £1.35.

This matters at the macroeconomic level for the country’s prosperity but it also reflects something is not quite right within the economy. Why are British firms lagging behind their European counterparts? The complexities of the productivity puzzle are discussed at length in a briefing from the Bank of England in March 2017, not least its sheer intractability.

One thing we know for sure is that longer hours aren’t the answer. People in the UK work amongst the longest hours of any European nation. According to the OECD, the average British worker puts in 36.5 hours a week, compared to 34.5 hours in Germany and 36.1 hours in France. To use a cliché, we need to work smarter, not harder.

When it comes to specific parts of the economy, the situation is complicated by the fact that the productivity of some jobs is easier to measure than others. A factory that makes 1,000 workstations a day with 50 workers is twice as productive as a factory that requires 100 workers to do the same job. In other parts of the economy, assessing whether productivity
has improved is harder and less objective.

For the UK’s thriving creative industries, the challenge is compounded by the fact that they face fierce competition to attract and retain the best employees, The good news is that the solutions to the challenge of employing world class talent often overlap with the things that make them more productive and creative.

This is an issue for the whole UK economy. The creative industries generate some £87.4 bn in revenue each year, employ some 2.9 million people and continue to grow. The design sector alone is the second largest in the world, worth £33 billion annually, and is a driver of profit across the economy. According to the Design Council, for every £1 invested in design, businesses can expect over £20 in increased revenues and over £4 in net operating profit.

So what happens in the creative sectors affects us all, and we all have a vested interest in ensuring they remain as productive and innovative as possible.

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