Weak investment, innovation and management hamper UK productivity – Reuters


A general view of the Canary Wharf financial district in London, Britain April 25, 2021. Picture taken April 25 with a drone. REUTERS/Kevin Coombs

LONDON, Nov 15 (Reuters) – Low business investment, weak management and too few commercial patents are the main factors behind Britain’s weak productivity record that has been a puzzle for policymakers for years, according to new research published on Monday.

The study, by researchers at the London School of Economics and the Resolution Foundation think tank, said low business investment was the clearest difference between Britain and higher-productivity nations.

Business capital investment in Britain was 10% of gross domestic product in 2019, compared with 13% on average in the United States, Germany and France.

British business investment in research and development also lagged behind levels in other countries.

Last month Prime Minister Boris Johnson highlighted Britain’s productivity problem though few economists agreed with his diagnosis that immigration of low-paid workers from the European Union bore much of the blame.

Output per hour worked in Britain is around 15% below that in the United States, Germany and France – though above that in Japan, Italy and Canada – and has barely grown since the financial crisis.

Bank of England policymaker Jonathan Haskel, speaking on a panel to discuss the report, said Brexit played a big role in depressing business investment since the 2016 referendum and would continue to do so.

“You might for political …….