The UK is currently facing the biggest slowdown in productivity in 250 years, according to research from University of Sussex and Loughborough University.
Productivity is now 19.7% below the pre-2008 trend path for 2018, nearly double other productivity slowdowns that have occurred in the last ten years, and described by one of authors of the study as “shockingly bad”.
Other productivity slowdowns in the past have included The Great Depression of the early 1930s, which saw a decrease of about 5.3%.
The report, which is due to be published later this month in the National Institute Economic Review, attributes the slowdown to a combination of three factors: the ongoing impact of the 2008 financial crisis, the “waning impact of information and communications technology” and Brexit.
Nicolas Crafts, Professor of Economic History at the University of Sussex Business School, said:
“We cannot say for certain the reasons behind this unprecedented slowdown but we can offer a conjecture that a combination of adverse circumstances, itself unprecedented, may be responsible for a large part of the evaporation of productivity growth since 2008. The unfavourable conditions include the ebbing away of the ICT boom, the implications of the financial crisis and impending Brexit.”
The role of Robotic Process Automation in productivity
Although this may seem like alarming, for some the slowdown may be an opportunity for technological innovation. Peter Walker, the European chief technology officer at Blue Prism believes that this could see the acceleration of Robotic Process Automation (RPA), in which certain repetitive workplace tasks are automated in order to free up employees for other things:
“Future economic historians will likely have a very different perspective on this period of sluggish productivity growth. Rather than framing it as a ‘lost decade’, they will see how the explosion of big data, computing power and automation laid the foundation for the next profound leap forward in productivity levels. As business automation technologies become more widely adopted, we’ll see office workers spend less time on rote and manual tasks and focusing more on value-adding activities.
“In our own experience, [RPA] provides a path forward by making it easy for business people, without technical abilities, to automate a wider range of activities and action many other automation opportunities that exist within the enterprise. For example, John Lewis & Partners saved approximately 100 days of human working time by implementing RPA to automate its fraud detection technology.
“The UK has been held back by low productivity growth for too long. Our businesses should embrace the next generation of automation technologies, taking a host of admin and manual tasks off employees’ to-do lists and enabling them to focus on the strategic and creative thinking that will help grow our economy.”