Lagging of the Productivity of the UK - Article Example

The major causes of the poor track record of the UK in terms of productivity is a low investment, lack of skills, and regulatory constraints. In a person such as the Exchequer Gordon Brown’s UK Chancellor, in his speeches, productivity is his main theme. However, even though the UK is lagging, it is far at the forefront in terms of labor and capital markets structural amendments. To come up with the analysis that UK’s productivity is low, an examination of the economy’s six sectors took place and the results indicated that it’s true that output was low. Those sectors examined are; car production, retailing software, telecoms, food processing, and hotels. McKinsey Global Institute a global most highly regarded management consulting firm is the one that conducted the research regarding the matter.

UK should address several issues to increase its output. One of the major concerns is increasing expenditure to boost high levels of research and development and reducing the diversion of resources towards the public sector which is less productive. The state needs to increase its level of investment even though the Crash of Lehman Brothers led damaged the country’s economy in 2008 because many other firms held off from investing in the modern, most efficient technology and processes. Businesses should enhance their levels of innovation, come up with good labor relations, improve their technology usage, and adopt modern technology to ensure that businesses stay for long in their field. The government should come up with extra reforms in its business regulations to boost investment thus increasing the productivity of the country.