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Factors Influencing Recent Productivity Growth—Report On a Survey of Companies

Published online by Cambridge University Press:  26 March 2020

G.C. Wenban-Smith
G.C. Wenban-Smith*
Affiliation:
National Institute of Economic and Social Research
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Extract

Last year was marked by what appears to have been an unprecedented improvement in the productivity of manufacturing industries. The previous half-decade was distinguished by a productivity slowdown. This article considers recent movements in productivity at Industrial Order level, and reports the results of a survey, carried out at the end of 1981, on the factors which had been important in determining companies' productivity growth through the seventies.

Type
Articles
Information
National Institute Economic Review , Volume 101 , August 1982 , pp. 57 - 66
Copyright
Copyright © 1982 National Institute of Economic and Social Research

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References

(note 1 in page 57) ‘Productivity’ in this article is defined as output per employee.

(note 2 in page 57) This work is part of a larger investigation into recent and prospective productivity trends in the UK, financed by HM Treasury.

(note 3 in page 57) ‘A study of the movements of productivity of individual industries in the UK, 1968-79’, G. C. Wenban-Smith, National Institute Economic Review, no. 97, August 1981.

(note 4 in page 57) The Industrial Panel consists of a group of (mainly large) firms who regularly assist us in our inquiries. We are very grateful to those who helped us in the present inquiry.

(note 1 in page 59) ‘Energy conservation in the UK’, National Institute Discussion Paper, no. 44, 1981.

(note 1 in page 60) The experience described by the companies in our sample contrasts with the predictions of the model constructed by Professor Bruno to analyse the effect of input factor price changes on profits and productivity. (M. Bruno, ‘Raw materials, profits and the productivity slowdown’, NBER Working Paper 660). The model summarises the interactions of technology, factor use and real factor price effects in a ‘factor price frontier’ framework. Bruno's analysis attributes half the slowdown in total productivity (but also labour productivity) in the UK to the rise in relative raw material prices.

(note 2 in page 60) E. F. Denison, ‘The sources of economic growth in the United States and the alternatives before us’, Supplementary Paper no. 13, Committee for Economic Development, 1962, p. 157.

(note 3 in page 60) Total expenditure on research and development in the UK, as a percentage of GDP at market prices, declined from 2.32 in 1964 to 2.14 in 1978—see J. R. Bowles, ‘Research and development, expenditure and employment in the seventies’ Economic Trends, August 1981.

(note 1 in page 61) See National Institute Economic Review, no. 98 November 1981, pp. 14-15.

(note 1 in page 62) CBI Industrial Trends Survey, February 1982.

(note 1 in page 65) A copy of the questionnaire is available on request.