DTI blamed for the UK’s poor productivity

The blame for the UK’s failure to keep up with its economic rivals in terms
of productivity has been laid squarely at the doors of the DTI

The DTI has been blamed for poor productivity in the UK because of its
preoccupation with introducing employment regulation rather than driving

The Institute of Directors (IoD) claims the department’s contradictory
agenda of promoting competitiveness while regulating business undermines its

The DTI has announced that it is employing business guru Michael Porter to
help improve the UK’s poor productivity through better management, but the IoD
claims the department itself is partly to blame.

Richard Wilson, the IoD’s business policy director, said the DTI decision to
employ Porter would only prove valuable if followed through.

"I hope that Porter’s study is not just another scheme which will be
abandoned or quietly forgotten in a few years," he said.

Wilson believes the weight of legislation introduced by the department over
the past five years has not helped business drive up productivity.

"It was the DTI’s intention to introduce a ‘light touch’ simply to
comply with regulations, but I have not seen that to date – the National
Minimum Wage guidelines were 112 pages and the Working Time Regulations 96
pages. Employers are bound to have been distracted to some extent," he

Andy Westwood, head of policy research at the Work Foundation agrees the DTI
has been so focused on improving fairness at work that it has taken its eye off
the ball in terms of improving UK competitiveness.

He wants Porter’s study to provide sensible recommendations that will be
affordable, accessible and relevant for the majority of the UK’s employers.

Trade and Industry Secretary Patricia Hewitt responded to the criticism.

"We can make a real difference to future business success by working to
create fair and efficient markets, a dynamic and highly skilled labour force
and through the promotion of science and technology," she said.

By Ben Willmott


Recent management development iniatives

January 2002 Investors in People develops standards for
leaders and work-life balance.

February 2002 The Economic and Social Research Council
launches a £17m, five-year management research initiative through the Advanced
Institute of Management. One aim is to tackle the apparent gap in productivity
between UK businesses and other countries.

March 2002 The Society of Chief Personnel
Officers introduces the Leadership Competency Framework, to help councils
benchmark leadership skills through best practice and behavioural models.

June 2002 The Council for Excellence in Management And
Leadership ends a two-year research project on the UK’s management record with
30 recommendations on how to improve management and leadership in the UK.

July 2002 The Centre for Management and Policy Studies
(part of the Cabinet Office) introduces Prime:Leadership, a web-based
e-learning programme to help public servants develop strategic leadership

October 2002 
Research by Proudfoot Consulting based on analysis of 1,357 companies,
plus an opinion poll of 2,700 CEOs, reveals poor management as major reason
UK’s productivity lags behind its main economic rivals.

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