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Small incremental benefits boost productivity

Like marginal gains in competitive sport, small incremental benefits affect individuals by making their work quicker and smoother

One of the major challenges to economic advancement in our country is low productivity. Growth can come from either more employment or higher productivity, but while employment in the UK is growing productivity is not as high as it could be. Since growth defines our wealth both as a nation and as individuals it is in our interests to see it rise.

According to the government’s productivity plan, if the UK became as productive as the US it would raise GDP by 31%. That equates to £21,000 for every British household. But how do we get there when Britain’s productivity is famously so far below other advanced economies?

A combination of infrastructure investments, tax changes and up-skilling are planned for the UK. Nearly £7 billion will be invested into research and science. Catapult centres that commercialise technology and the ‘Northern powerhouse’ will be boosted, planning laws relaxed, and by the end of 2017 95% of all UK businesses and households will get fast broadband.

But while these policies are making an impact on national productivity, individual companies also need to improve.

Collaboration increases productivity when people share knowledge, experience and skills. Working across borders is now common but there are many situations where data is not joined up, leaving departments and individuals isolated. Without correct and timely information decisions may be based on incomplete understandings and errors made that adversely affect productivity.

One by-product of collaboration on a shared platform is universal access to all the information that a project generates. This has a significant positive effect on productivity. This type of practical productivity gain is a direct result of developments in software. When advances are tailored to specifically reduce individual key strokes and mouse movements, some tasks – particularly in design and engineering – can be done much quicker. That immediately leads in some cases to productivity gains of 50%. On a hardware level CPU usage can be optimised according to the task in hand.

Like marginal gains in competitive sport, small incremental benefits like these affect individuals by making their work quicker and smoother. Their cumulative effect over many thousands of jobs and days is a significant economic contributor.

When Dave Brailsford became performance director of British Cycling he searched for all the weaknesses and problems in the team and set about improving them one increment at a time.

Each weakness was not a threat, but an opportunity to make positively received adaptations. He was quoted by the BBC as saying: “The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike and then improved it by 1%, you will get a significant increase when you put them all together”. Rapidly the gains, and gold medals, began to accumulate.

Technological advances like these help our economy become more dynamic by improving individual working lives, business prospects and society’s ability to innovate. If the priority target for the British economy is increased productivity then marginal gain seems like a good way to hit it.

Stephen Chadwick is managing director of EuroNorth Dassault Systèmes