Manufacturing in the UK is in danger of losing out to Europe in the
productivity stakes, unless the Government addresses the three key problems of
investment, skills and innovation.
The latest study by the Engineering Employers’ Federation (EEF) warns that
the UK is falling further behind its continental rivals on the fundamental
aspects of productivity improvement.
The research Bridging the Continental Divide urges the Government to refocus
its efforts towards skills development, with greater investment to close the
productivity gap with Europe.
Martin Temple, director general of the EEF, complained of a lack of action
to tackle the problems in the recent budget.
"The UK is falling dangerously behind on the fundamentals, and without
firm action to support investment in manufacturing, both government and
business will fail to achieve the necessary productivity gains," he said.
The EEF claims manufacturing is suffering from a chronic lack of staff with
intermediate skills because so few people are undertaking apprenticeship
This compares particularly badly with Germany, where there’s an embedded
culture of work-based training, with more than 60 per cent of young people
However, the research also highlighted problems at the higher level of the
workforce, with a shortage of engineers and skilled personnel.
Temple claims the Government is placing too much emphasis on competition as
the answer to productivity growth. He cites the examples of France and Germany,
which both have less competition than the UK but remain more productive.
"There is no silver bullet for tackling the UK’s productivity gap but
it’s clear that government policy needs to be refocused on improving the
environment for investment in UK manufacturing," he added.
The survey shows the UK’s lead over its competitors in terms of labour
market flexibility and lighter regulation is eroding.
By Ross Wigham