Can good work help unscramble the productivity puzzle?

October 24, 2019

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by Gail Irvine, Senior Policy and Development Officer

Our partnership project with the RSA has been considering how ‘good work’ contributes to solving the UK productivity puzzle. That is, the riddle of why the UK today underperforms internationally on output per worker – the efficiency with which workers produce goods or services – compared to recent decades.

To anyone who is not an economist, productivity may sound dry and abstract. There is live debate about how we measure productivity correctly, and how much importance we should even attach to productivity amidst other economic, social, and environmental indicators. The Carnegie UK Trust has been active for many years in the push to look beyond purely economic indicators to measure and value social progress. We advocate the use of wellbeing frameworks, to capture much more of what really matters to societies – not only material wealth but also quality of work, health, the environment and our sense of security and cohesion. Set within this wider basket of measures we recognise the contribution that economic growth can make to improving lives. Productivity growth still matters because, historically, boosting productivity has been a key determinant of wage growth and improvements in living standards.

When our project began to look at these two complex concepts (job quality, productivity) and their interrelationships, I wrote that we might find ourselves posing more questions than answers to the productivity puzzle. We wondered what impact key aspects of job quality – such as pay, job security, or the ability to express your ideas at work – exert on workers’ productivity. Would some aspects of job quality be found to boost productivity more than others? In what kinds of jobs or sectors were mutual improvements in job quality and productivity more visible, or easier to achieve? What of the potential for new workplace technologies to reinforce or disrupt quality of work and productivity?

The last six months of this work has provoked some deep thinking and started teasing out the answers to some of these questions. We commissioned new research and analysis into job quality and productivity from our academic partners, the Warwick Institute for Employment Research. Recognising that academic evidence was only one source of insight, the RSA held ‘Employer Dialogues’ and visited workplaces to understand how decisions about quality of work and productivity were playing out on the ground. The dialogues involved employers from a range of sectors in a discussion about the current or potential use of ‘good work’ to boost productivity, drawing out the critical role of management in enabling or inhibiting such strategies. We also convened an Expert Group, chaired by Matthew Taylor, CEO of the RSA, to critically review and bring different insights to our research findings.

The Carnegie UK Trust, in agreement with the members of the Expert Group, take as our starting point in this whole endeavour that the good work really matters for our wellbeing. Irrespective of its uses for improving productivity, enabling good work for all should be a public policy goal. Indeed, Matthew Taylor’s Employment Review outlined five key reasons why good work matters, of which boosting productivity is only one. Clearly work which pays enough to get on in life, which is fulfilling, offers a sense of purpose and participation and a safe working environment delivers a raft of benefits to individuals and communities. Compare this to the individual and societal costs of work which is dangerous, demeaning, unfulfilling or bad for your health.

However, there is concern from across the political spectrum about our stagnant productivity, with its dampening effect on living standards, earnings, tax take and the UK’s global competitiveness. The economic uncertainty and upheaval accompanying the UK’s negotiations to leave the EU and the future negotiations on a new trading relationship are likely to stagnate productivity further unless we take steps to mitigate this. In the twin ambitions of the UK’s industrial strategy – to increase productivity and ensure good work for all – we see an opportunity to provoke more serious policy thinking about how more ‘good work’ might be the missing piece of the productivity puzzle.

We are taking full advantage of this opportunity. We are happy to admit that we don’t have all the answers (or even command of all the questions) on the interactions between good work and productivity. We want to focus more minds on what these concepts mean in theory, how we measure them accurately, and how we leverage their potential in our workplaces. That’s why, alongside new research and analysis, we are putting together an essay collection examining the role of good work in solving the productivity puzzle. The essays will feature different voices from this debate – from policy, business, academics and trade unions, from UK-wide perspectives to how this agenda is being taken forward in Scotland and Wales. Collectively they will explore key facets of ‘good work’ and productivity and address some of the different sectoral, regional and economic dynamics and their challenges. The collection will be allow us to set out the range of considerations our investigation has uncovered so far on how to maximise the link between good work and productivity. It will provide a marker for where industrial policy needs to move to if we are to fulfil the UK Government’s ambitions to increase productivity and good work for all.

Our collection Good Work and the Productivity Puzzle and our new research and analysis will launch in winter 2019, so watch this space.