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Why is the UK's productivity so low? Watch

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    Why is the UK's productivity so low? Any ideas would be appreciated! Have to write this as an exam-style response but any help would be useful.
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    (Original post by student27839)
    Why is the UK's productivity so low? Any ideas would be appreciated! Have to write this as an exam-style response but any help would be useful.
    Lack of natural resources
    Labour is expensive in the Uk.
    It is cheaper to produce in Low income countries where costs are cheaper.
    The UK has many regulations in place by government which makes production processes more expensive.
    The market in the UK isn't growing much anymore, not compared to markets such as Asia.

    Hope this helps
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    (Original post by Roberto12)
    Lack of natural resources
    Labour is expensive in the Uk.
    It is cheaper to produce in Low income countries where costs are cheaper.
    The UK has many regulations in place by government which makes production processes more expensive.
    The market in the UK isn't growing much anymore, not compared to markets such as Asia.

    Hope this helps
    These do not necessarily result in low productivity. For example, labour may be more expensive because they can produce more of a given product in the same amount of time. If anything the UK is more well known as a country with a much more flexible workforce vs France, Germany etc. where regulations regarding worker's rights (right to strike etc.) can encourage companies to invest more into capital of greater efficiency than workers.
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    (Original post by student27839)
    Why is the UK's productivity so low? Any ideas would be appreciated! Have to write this as an exam-style response but any help would be useful.
    We have some of the longest working hours among European countries. This can mean that output per worker per hour is less than it otherwise may be - workers are less productive (diminishing marginal returns).

    Also, a lack of investment in key education sectors such as engineering.

    In the short term, a lack of investment resulting from poor confidence can cause declining worker productivity over time.

    There are non-economic explanations also. The 'friday work ethic' is something to consider when comparing labour productivity
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    Too much regulation that stop productivity driven change in a company
    High tax rates may inhibit profit accumulation which maybe/ could be spent on capital expenditure by business
    Government may not of made up the short fall in capital expenditure that the private sector is not spending (increasing output gap)
    There is a predicted 1-2% gap in the calculations produced by the ONS with respect to productivity according to the BOE
    Low interest rate environment may unnecessarily be encouraging zombie companies to survive thus shifting investments away from dove companies
    QE distorted the market thus investors are unable to distinguish between failing and thriving companies in the environment
    Lack of resources in the country
    To the contrary of another individual on this forum, a above equilibrium wage rate encourages productivity and a flexible labour market makes it cheaper to hire and fire workers than to train them
    Too many lost working days by stressed employees with health problems
    Lack long run productivity driving expenditure such as education
    80% of British business are SME's and alot of them tend to be family run. This encourages nepotism which in aggregate reduces productivity
    A higher wage/ bonus may encourage employees to work harder, more productively or smarter to achieve to exceed targets and it may not be used in the UK as an incentive widely to make any substantial difference.
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    British workers are generally obese and glued to their smartphones ? they are not nimble and task-oriented like the Chinese etc.
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    We're quite a individualistic and indulgent society. Meaning that we like to focus on our own individual achievement as opposed to our team. (Which I assume affects overall productivity if we're just trying to focus on ourselves only). We are indulgent, as we value free time and focus on enjoying ourselves, we see it as important. Hence we demand and expect more free time and reasonable working hours.

    On the flip side, China scores high on collectivism. Meaning they value a common goal over a personal goal. (i.e. Company success valued over their promotion). They are less indulgent (although this is changing), meaning they care less and don't demand so much free time and perks as we do.

    For example, a free gym pass provided with your job would be valued more by a British worker, than it would by a Chinese worker.

    https://geert-hofstede.com/united-kingdom.html This is a analysis of the UK and China's culture used mainly for international HR, but you may find it useful.
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    (Original post by Lord Samosa)
    We're quite a individualistic and indulgent society. Meaning that we like to focus on our own individual achievement as opposed to our team. (Which I assume affects overall productivity if we're just trying to focus on ourselves only). We are indulgent, as we value free time and focus on enjoying ourselves, we see it as important. Hence we demand and expect more free time and reasonable working hours.

    On the flip side, China scores high on collectivism. Meaning they value a common goal over a personal goal. (i.e. Company success valued over their promotion). They are less indulgent (although this is changing), meaning they care less and don't demand so much free time and perks as we do.

    For example, a free gym pass provided with your job would be valued more by a British worker, than it would by a Chinese worker.

    https://geert-hofstede.com/united-kingdom.html This is a analysis of the UK and China's culture used mainly for international HR, but you may find it useful.
    I'm not sure I agree with the China collectivism/Confucious argument.

    I'd argue that promoting self interest results in greater productivity gains than communist ideals of a collective workforce. The Chinese are actually less labour productive than those in the UK.

    Just having a large workforce and working for a common interest does not necessarily improve labour productivity.
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    (Original post by harryleavey)
    I'm not sure I agree with the China collectivism/Confucious argument.

    I'd argue that promoting self interest results in greater productivity gains than communist ideals of a collective workforce. The Chinese are actually less labour productive than those in the UK.

    Just having a large workforce and working for a common interest does not necessarily improve labour productivity.
    You're correct. Collectivism also means that you're more "loyal" to your current group, and so collaborative work with other groups suffers as a result.

    There's up and downs of either types of cultures, we naturally will prefer and view the British way of things as better.

    I got my conclusion about China's collectivism from Hofstede's research (see link in my original post). But yeah, their culture is changing fast.
 
 
 
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