Complacency is harming productivity
British productivity has grown at less than half the average rate of the 25 richest OECD countries, and British small and medium-sized companies are the least productive in the G7 apart from those in Japan. Oddly, though, directors of these SMEs don’t seem to see the problem. They’re more confident than they should be, according to a report by Be the Business cited in the FT. Put another way, they’re “good at complacency”. More concretely, they’re not investing enough. Separate research from the Resolution Foundation says UK GDP would be 4 per cent higher today than it is if average British business investment since 2008 had matched that in France, Germany and the US. Brexit is a factor, but so are a failure to embrace technology fast enough and a general reluctance to step back, think big and plan for the future. Instead, hard-pressed entrepreneurs mortgage their homes and work hard to survive but function as “accidental managers” rather than the real thing. The puzzle of low British productivity continues to defeat politicians but a simple lesson from business is it’s no place for gifted amateurs.
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