29 May 2018

Major research project launches to solve UK’s productivity puzzle

A new national research network which aims to improve understanding of the factors affecting UK productivity was officially launched in London this month.

Introduction and business context presentation.

The Economic and Social Research Council (ESRC) funded Productivity Insights Network, led by the University of Sheffield, will forge new interdisciplinary social science insights about productivity – arguably the most pressing economic challenge facing the UK.

Led by Professors Philip McCann and Tim Vorley, from the Management School, the Productivity Insights Network is an ambitious initiative, co-producing new research-based insights with public, private and third sector partners.

Lord Jim O’Neill, Chair of the Productivity Insights Network’s International Advisory Board, spoke at the launch event, where researchers presented the findings of an analysis of the current gaps in UK productivity research.


Raising productivity is arguably the central economic challenge in the UK, but to achieve this we need to better understand the drivers and inhibitors of productivity.

Lord Jim O'Neill

Chair of the Productivity Insights Network’s International Advisory Board


Lord O'Neill continued: "There are many different factors that influence productivity, ranging from skills, infrastructure, technology, migration, trade, and international investment as well as the regulatory and institutional environment. Each of these factors interact with each other in different ways to influence productivity growth. Over the next three years the Productivity Insights Network will unpack these factors, how they interact and play out spatially across the UK."

He added: “The complexity of the productivity puzzle is complicated further by the question of measuring productivity, especially in some knowledge-intensive sectors where information and communications technologies dominate.

“Yet, exactly how all of these factors and influences interact to drive productivity is not well understood. While we are able to measure productivity growth with a reasonably high degree of accuracy, we are still unsure about many of the mechanisms underpinning this growth.

“Over recent years the role played by cities and regions in fostering productivity growth has also become a major focus of research and policy-thinking. International evidence suggests that the performance of countries depends crucially on the productivity growth of the country’s cities. Countries demonstrating productivity growth have typically seen strong growth in their core cities.

“In the UK many of our great cities had been underperforming economically for decades, and only recently have some of these cities started to display an economic turnaround. Many of our great urban areas are very close to each other geographically, but this is not the case in terms of their connectivity, coordination and cooperation.

"These shortcomings have contributed to the underperformance of the UK economy, and overcoming these failures was central to the policy-agenda I led while I was at HM Treasury.”

The Productivity Insights Network has academic co-investigators based at the University of Cambridge, Cardiff University, University of Strathclyde, Durham University, University of Glasgow, Glasgow Caledonian University, University of Leeds and the University of Essex, as well as two private sector Co-Investigators – Cambridge Econometrics and SQW Ltd. The wider Productivity Insights Network has a membership of over 50 academics as well as a growing number of public, private and third sector partners.

As well as providing thought leadership and being a forum for collaboration, the network will:

  • pull together interdisciplinary research groups and other networks in academia, policy-making and business;
  • promote the use of innovate methods;
  • commission a series of research projects;
  • collaborate and cooperate with existing research centres;
  • contribute to policy development;
  • Undertake relevant projects.

Professor McCann, Director of the Productivity Insights Network, said: "Over the next three years the Productivity Insights Network will provide a unique opportunity to make more sense of the UK productivity puzzle by advancing new interdisciplinary insights as well as how the puzzle can be addressed.

“The Productivity Insights Network will provide the government with a deeper understanding of the main causes of low productivity in the UK with a view to stimulate productivity.

“Understanding the productivity conundrum is not just central to the economic performance of the UK, but also raising living standards and reducing inequality.

“While productivity was once the preserve of economists, the Productivity Insights Network will bring together social scientists working in disciplines from management to sociology and planning to politics along with a range of public, private and third sector partners.”

Professor Vorley, Deputy Director of the Productivity Insights Network added: “Despite being a political priority the productivity puzzle continues to frustrate economists and policymakers. The aim of the Productivity Insights Network is to rethink the productivity issues facing the UK and to develop new insights that challenge conventional views.

“Understanding the productivity conundrum is not just central to the economic performance of the UK, but also raising living standards and reducing inequality.

“In order to better understand the UK’s productivity challenges, the Productivity Insights Network will employ a place-based lens to investigate the extent to which many UK productivity-enhancing and productivity-inhibiting processes are related to geography.

A world-class university – a unique student experience

Sheffield is a research university with a global reputation for excellence. We're a member of the Russell Group: one of the 24 leading UK universities for research and teaching.