Engendering a National Obsession with Productivity


Why would we want to Engender a National Obsession with Productivity?


Organisations improving their productivity levels are able to invest more, generate more profit, pay more to the Exchequer and are more competitive.


‘A National Obsession with Productivity’ is something that would benefit us all and offers a common rallying call that the Government could adopt; not least because we have a long-term UK problem with productivity [1]. It is also timely because technology advances, particularly artificial intelligence (AI), offer not just traditional improvements in productivity but order of magnitude improvements, where significant parts of jobs can be replaced and augmented [2a][2b][2c].


In addition, a ‘Productivity Obsession’ provides a common purpose and focus for growth, post-Brexit, post-pandemic and aligns with the Government’s ‘Levelling Up’ agenda and ambition to be a ‘science superpower’.


The rewards of increased productivity for the country, if we can achieve it, are huge. We have a productivity gap with G7 countries of 16% [1]. Forecasts suggest each 1% increase in productivity would increase our national output by £20bn, reducing the deficit by £8bn. [3]


How can we make this happen?  


There is one fundamental initiative:

  • institutionalising measurement of productivity in every organisation through new accountancy requirements and a common simple approach to measure and report annually on productivity, making it a key factor on which every organisation is compared and judged by investors and other stakeholders

and two important enablers:

  • putting productivity at the heart of the corporate tax system, incentivising action and rewarding success e.g. by allowing a portion of any increase in profit as a result of productivity investment to be free of corporation tax for a period of time
  • ensuring everyone in society benefits in practical and tangible ways e.g. a new National Fund and National Dividend linked to productivity improvement

Each of these is valuable for driving productivity improvement, each is additive and has the valuable attribute of being relatively low cost to implement, largely self-financing and of evident benefit to organisations and the public at large.


On top of these, we need to remove barriers to harnessing the power of artificial intelligence and encourage take-up by making assistance readily available. We need to create AI hubs and an associated eco-system, including training and consultancy, to support organisations and entrepreneurs to harness the power of AI. This is particularly important in parts of the country that have lagged in adopting technology.


We can however energise all this further, by wrapping these initiatives up as part of a National Project for UK recovery. Associated promotional campaigns by Government would target Business, Public Sector and the public, all supported by regular reporting of consolidated company productivity metrics by the Office of National Statistics. It requires strong political leadership and a bold communication plan to make it happen and to make it a rallying cry.  However, it offers a very positive and much needed approach to driving the country forward post-Covid, which also aligns with all Government strategies and our future as an AI Society.


The left-behind areas


AI (and robotics) also gives us the opportunity to compete in manufacturing with other parts of the world, while also improving our self-sufficiency for times of crisis. This manufacturing revival opportunity is particularly appropriate in ‘left behind’ areas that were traditional manufacturing bases, as part of the Levelling Up agenda.


Engendering a national productivity obsession clearly benefits every corner of the UK. In particular, the AI hubs and associated eco-system should figure strongly in the’ left behind’ areas, to ensure diversity of job creation and of jobs that won’t be replaced by AI in the future. The use of part of the National Fund to fund the Government Levelling Up agenda would also particularly benefit the ‘left behind’ areas.  


Ensuring everyone is seen to benefit


In order to achieve public ‘buy-in’ it is essential everyone in society is seen to benefit in tangible ways and feel part of an entrepreneurial drive. This could be realised by part of the extra money raised in tax, as a result of continually improving productivity, going into a National Fund. This fund would pay out a National Dividend each year to every citizen but should also be visibly seen to contribute additional funding to the Levelling Up agenda.


Removing obstacles


A focus on substantial productivity increases inevitably means embracing the huge potential of AI. Although AI can enhance many jobs by augmenting individual capabilities and create new jobs, it can also be seen as replacing jobs. So, the main obstacles will be the attitudes of employees and trade unions, who may well see it as a threat. Indeed, a lot of job disruption is forecast as a result of automation and AI [4]. A national productivity obsession will clearly accelerate this scenario. Therefore, it is essential to ensure employee stakeholders, and unions on their behalf, are convinced that they too will share in the benefits of substantially increasing productivity.


Note that the need to tackle this is an inevitable consequence of AI, not of this proposal and therefore must be tackled at some point. This proposal suggests that, as well as the National Fund and Dividend, it is tackled head-on in three ways:

  • Incentives and infrastructure for organisations and Government to reskill and redeploy employees while supporting income
  • Employee income-related benefits, or working hour benefits, geared to actual productivity improvements achieved
  • Putting AI at the heart of the corporate tax system both in terms of incentivising deployment initially and then a geared contribution from substantial productivity gains to cover the cost of job disruption




This proposal particularly supports the ‘left behind’ areas, but also supports every region of the UK. It encourages an entrepreneurial and ambitious mindset across the whole of society in a way that can deliver tangible benefits to every one of us and address the UK’s Covid-related debt.




[1] Productivity: Key Economic Indicators - House of Commons Library
[2a] How Artificial Intelligence Increases Business Productivity a study by Accenture says AI has the ability to increase productivity by 40% or more
[2b] Global survey: The state of AI in 2020 | McKinsey. A small contingent of respondents attribute 20 percent or more of their organizations’ earnings before interest and taxes (EBIT) to AI
[2c] Artificial intelligence will increase productivity . Computer Weekly 2016 citing 300% improvements
[3] Impact of 1% uplift in productivity on the economy: Raconteur 2016
[4] Rethinking Automation: the Nature of Work after Covid. All-Party Parliamentary Group on the Future of Work and the Institute for the Future of Work – December 2020.


Back to Latest Articles Page