CAN BRITAIN BRIDGE THE PRODUCTIVITY GAP

In the early 1990s, labour productivity levels in British manufacturing including engineering were significantly lower than in four of our major competitors, the United States, Germany, France and Japan. There was some improvement in Britain's position in the 1980s but further improvement will require a greater commitment of investment in physical capital, workforce skills and research and development to bring these up to the levels achieved in other countries. Britain's past track record on investment, particularly in labour force skills suggests that this improvement may take some time.