For the first time, the DTI has spelled out exactly what it believes UK employers need to do to make the UK more competitive
More effective people management and greater workplace partnership have been identified by the Government as two of the major tools for tackling the UK's chronic productivity problem.
For the first time ever the DTI has released an official strategy for driving productivity improvements and spells out some explicit measures and targets to enable it to achieve this.
The strategy outlines five priority areas that the DTI intends to focus on. These include helping business to successfully exploit new ideas and the promotion of open and fair markets at home and abroad. It will also strive to strengthen regional economies and to forge closer partnerships with key economic players both at home and abroad. The final strand is the need to maximise staff potential.
Crucially, it highlights a range of HR issues as central to the solution - citing management techniques, building skills, high performance workplaces and partnership as part of the strategy.
The document follows a large-scale study by the DTI, which called in US guru Michael Porter to investigate why the UK lags so far behind its global competitors in the productivity stakes.
Focusing on change
Launching the strategy, trade and industry secretary Patricia Hewitt said that productivity improvements were the key to UK plc becoming more competitive. She said developments in technology and an aging workforce, coupled with greater global competition, were making high productivity even more fundamental to business success.
"This will sharpen the DTI's focus for the next five years," she said. "Raising productivity will ensure that Britain really does provide opportunity and prosperity for all its citizens."
Research shows that productivity in the UK is consistently at lower levels than its major competitors, with a persistent gap of at least 20 per cent over the past decade. The UK also invests less than its competitors in both capital and people. The strategy identifies better qualifications and improved skills as points of focus.
The document defines the factors that create high performance workplaces, including modern management practices that develop workforce skills and deploy them flexibly.