The UK lags behind almost all of its major economic rivals in terms of overall competitiveness, and has now been overtaken by Chile.
Government attempts to address the issue have only created confusion, following a botched rebranding of the Department of Trade and Industry (DTI).
The UK is only 22nd on the World Competitiveness Scoreboard, part of the 17th annual World Competitiveness Yearbook (WCY), having fallen five places in the last five years.
The WCY analyses and ranks the ability of nations to create and maintain an environment that sustains the competitiveness of enterprises using 314 criteria.
While economic performance puts the UK in 14th place in the world, the overall picture is damaged by a lack of government efficiency (27th place) and business efficiency (26th place). Business efficiency is dragged down by management practices, which rank a meagre 38th place.
In a bid to restore the UK’s competitiveness, the government rebranded the DTI as the Department for Productivity, Energy and Industry. But following a barrage of criticism from business leaders, the government did a u-turn and changed the name back to the DTI.
The rebranding confusion has led to increased uncertainty over whose responsibility it is to boost productivity.
The DTI said it had plans in place to increase competitiveness, but Treasury officials insisted that Gordon Brown’s department is responsible for productivity.
Mike Cutt, HR director at DIY retailer B&Q, criticised the DTI’s focus on branding. “Labels don’t mean anything, it’s what you do that counts,” he said.
Chris Thomas, people and customers director at healthcare provider First Assist, said HR should take the lead on improving productivity. “UK plc does need to improve in the world tables, and it is up to HR to make people understand this issue, because no-one else will.”