Productivity and investment: time to manage the project of renewal
Think tank: National Institute of Economic and Social Research (NIESR)
Author(s): Paul Fisher
March 12, 2024
This report from UK think tank the National Institute of Economic and Social Research aims to address the policy question of how to raise UK investment.
This report aims to address the policy question of how to raise UK investment in order to meet the long-standing challenge of a slowing in productivity growth.
The paper first reflects on the evidence and analysis previously submitted to The UK Productivity Commission and then proposes some areas for policy to address in order to enhance investment in the UK economy. It suggests that the underlying slowdown in growth and productivity is affecting all developed economies and has been happening in the UK for much longer than usually appreciated. Most likely this slowdown is the natural consequence of the changing economic structure as mature economies de-industrialise.
It recommends that policy should now focus on maximising welfare rather than GDP growth, taking into account the changing structure of the economy as it continues to evolve. That means supporting much broader concepts of investment than just physical plant and machinery, and reflecting the positive externalities associated with investment, particularly in people.
