The Economist - 11 November 2017 by The Economist

Author:The Economist
Language: eng
Format: mobi
Tags: The Economist, Tin tức
Publisher: The Economist
Published: 2017-11-09T18:45:26.209000+00:00

Giving Luddites a bad name

What fax machines and floppy disks reveal about Britain’s productivity problem

A third of British companies have seen no rise at all in productivity this century

Nov 9th 2017

PERHAPS the greatest problem facing the British economy—bigger, even, than Brexit—is weak productivity growth. During the 20th century the output per hour of British workers steadily increased. In the past decade, however, it has barely budged (see chart). That in turn has kept wage growth in check. The government says it will offer bold solutions to Britain’s productivity problem in its long-awaited “industrial strategy”, on which it is expected to publish a paper shortly. Yet take a look at the technology that British firms use, and it becomes clear that politicians have a huge task on their hands.

The technology at a firm’s disposal influences how productive it is. Some British companies use the whizziest stuff available. Funding Circle, a peer-to-peer lender based in London, uses machine-learning programs alongside more conventional methods to assess the creditworthiness of potential borrowers. In such firms, productivity growth tends to be high. Research by Andrew Haldane, the chief economist of the Bank of England, suggests that lately, around 1% of British companies have seen average productivity growth of a healthy 6% a year.

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