The bottom 20% of the workforce's potential is being "wasted", according to a report from the Centre for Social Justice (CSJ).
Productivity: The Great British Breakthrough suggests that a lack of investment and neglected vocational training in schools have prevented workers from disadvantaged backgrounds making the most of their abilities, and consequently hampered UK productivity growth.
The research warns that there are too few alternative routes through education and into employment for school leavers today, and that the education system is failing the majority of disadvantaged students.
The report also pointed to a lack of investment from employers in training their workers. The CSJ called for firms to make a "step-change" in their levels of investment in training and technology to kick-start productivity growth.
The UK’s stagnant productivity is believed to date from the financial crisis of 2007, according to the CSJ. If productivity growth had continued to progress at its pre-crisis rate of 2% to 3% per annum rather than today’s 0.2%, output per hour would be 20% higher than today.
The UK was also found to be lagging behind when it came to the adoption of productivity-boosting technology. It has been slower than its international rivals to take up technologies such as robotics, AI, the ‘Internet of Things’ (IoT), intelligent networking, and biosciences, leading the UK to have less mechanised and less modern industries than its peers.
Former work and pensions minister Iain Duncan Smith, who founded the CSJ, said businesses need to step up. “To kick-start UK productivity, business has a role to play in up-skilling the workforce and investing in innovation,” he said. “The last government created a record three million apprenticeships, but now the goal must be to build on that to increase the number of young people opting for in-work training as a valid alternative to going to university.”
He also suggested that immigration has contributed to the UK's productivity problem. "The arrival of cheap labour en masse has been damaging to the UK economy's long-term prospects," he said.
Andy Cook, chief executive of the CSJ, said that productivity is an issue that can be solved by “breaking down social injustices that cause poverty”.
“Low-paid work is inherently unstable,” he said. “The bottom 20% cannot reach their full potential if they are not equipped with the skills they need to climb the jobs ladder. At the same time, the economy as a whole suffers if these workers cannot contribute as their natural talents would allow if circumstances were different.”
