New productivity institute part of £37m investment to boost UK wage growth and living standards

A new institute in Manchester will boost research to explore how to increase productivity, boost wages and support the economic recovery across the UK backed by a £37 million investment, the government announced on Friday.

The new Productivity Institute based at the University of Manchester will be supported by £32 million of government and industry funding to identify barriers to increase productivity levels across the UK following the coronavirus crisis.

From September, over 40 researchers from leading UK institutions to work directly with policy makers and businesses to examine the UK’s productivity levels and the issues that impact productivity, such as working from home, workers’ well-being and lack of diversity in the workplace to identify key policies that could be implemented to unlock growth and deliver jobs.

Areas of research could involve understanding the supply and demand for labour and skills across regions and sectors, looking at how companies can implement new technologies and efficient processes to increase competition, improve working conditions, and accelerate the transition to a low carbon economy to future-proof industry and lower prices for consumers.

It comes alongside a new £5 million research programme at the London School of Economics (LSE) to accompany the Institute, which will identify ways that the UK’s most innovative products and services can be distributed more evenly across each sector of the economy to increase productivity.

Science Minister Amanda Solloway said:

"Improving productivity is central to driving forward our long-term economic recovery and ensuring that we level up wages and living standards across every part of the UK.

The new Productivity Institute and LSE’s innovative research will bring together the very best of our researchers, boosting our understanding of the different drivers of productivity and helping people and businesses earn more in every area of our economy."

Led by esteemed economist Professor Bart van Ark of the Alliance Manchester Business School, the Productivity Institute will seek to identify solutions that address imbalances in productivity between sectors and regions, as well as improving management practices. In doing so, they will also be working with eight partners including the Universities of Glasgow, Queen’s University Belfast and Cardiff.