UK productivity is poor compared with other developed nations and most studies show it falling further backwards, rather than improving. Post COVID-19 and post Brexit, we need to quickly develop strong and compelling reasons why others should invest in the UK, or buy our goods and services.
Where are there weaknesses in our economy that we should worry about and where should we look to invest, in order to realise opportunities for growth?
First, right now I feel that we are complacent about employment. In 2019 unemployment was less than 4% and this was the lowest that it had been since the 1970’s. Most of us need to work to earn a living, but also for self-belief, a sense of purpose and for intellectual or physical challenge. Our latest economic outlook suggests unemployment rising to 11% in 2021. That’s approaching 4 million people and is comparable with the worst of times in the past forty years.
Second, we need to take the link between education and employment more seriously. We need more focus on employment skills and vocational training. The apprenticeship levy has not achieved its goals and in fact apprenticeship starts have fallen by a quarter since its introduction. We send twice as many young people to university as we do to apprenticeships.
We should give our younger people the right options and opportunities, to boost our productivity and reduce inequality. We should all embrace a lifetime of learning. Click this link for some useful insight into why Skills Matter.
Third, we should invest where we have the potential to succeed in global markets. Here are some examples of our strengths, where we have opportunities for growth:
In summary, it is right that we worry about unemployment. It is damaging to productivity and to our wellbeing as a nation. By investing in learning and skills, we unlock the opportunity to succeed in a global economy which is seeing more change, and at greater speed, than it has ever seen before.
About the author: Richard Peberdy leads KPMG’s National Markets Deal Advisory business. An Economics graduate, he has spent the last 25 years helping our clients develop their strategic business models and then fund and execute their corporate development ambitions.