No. 48, Spring 2025 – Symposium on the UK Productivity Puzzle
The International Productivity Monitor (IPM) is the joint flagship publication of the Centre for the Study of Living Standards (CSLS) in Canada and The Productivity Institute.
Articles from the current edition of the IPM can be accessed below. Access to back issues from before 2021 as well as information on submission of papers for publication in the IPM can be obtained from the CSLS website. To receive publication information and updates from the International Productivity Monitor, please subscribe to our mailing list.
Number 48, Spring 2025
Editors’ Overview Andrew Sharpe (Centre for the Studies of Living Standards) and Bart van Ark (The Productivity Institute, The University of Manchester)
- This issue contains a symposium on UK productivity issues, with articles on the post-2007 productivity slowdown, regional productivity disparities, public sector productivity measurement and de-industrialisation and the productivity slowdown. The issue also contains an article on the impact of Artificial Intelligence on productivity, and a review article on a recent volume on productivity measurement issues.
Opportunities and Risks of Artificial Intelligence for Productivity Francesco Filippucci, Peter Gal, Katharina Laengle, Matthias Schief and Filiz Unsal (all Organisation for Economic Co-operation and Development)
- This article looks at how Artificial Intelligence (AI) might affect productivity in major economies like those in the G7. Based on recent research, especially from the OECD, it estimates that AI could boost total factor productivity growth in the U.S. by 0.3 to 0.7 percentage points per year over the next decade. Other G7 countries may see smaller gains, depending on how quickly they adopt AI and their mix of industries. The article also looks at the risks – like market concentration and algorithmic collusion – and the potential benefits, including more innovation and better use of skills and trade.
Symposium on the UK Productivity Puzzle: Insights from Data, Regions and Sectors
The UK Productivity Slowdown: A Review of Timing, Magnitude, and Drivers Josh Martin (Bank of England and King’s College London)
- Since the 2008 financial crisis, the UK’s productivity has grown very slowly. This article reviews research on why this has happened and offers new insights. It finds that the slowdown actually began before 2008, but this was hidden by a temporary boost from the finance sector. The causes of the slowdown include common global factors, but also some unique to the UK, like faster decarbonisation (reducing carbon emissions), which may make productivity appear lower. The study confirms past findings and suggests ways to improve how the UK measures productivity.
- Appendix
Are UK Regional Productivity Disparities Really Narrowing? An Investigation into Recent Productivity Data Revisions Fokke Reitze Gouma (University of Groningen), Philip McCann (University of Manchester) and Raquel Ortega-Argilés (University of Manchester)
- Recent data revaluations from the UK’s Office for National Statistics suggest that differences in productivity between UK regions might be shrinking after years of growing apart. This article takes a close look at that data and finds that it is actually hard to say for sure. The authors argue that the numbers don’t clearly show whether regional productivity gaps are closing or widening.
- Appendices
- ONS Response to “Are UK Regional Productivity Disparities Really Narrowing?” An Investigation into Recent Productivity Data Revisions Richard Prothero (Office for National Statistics) The ONS welcomes the above study that looks at whether productivity differences between UK regions are starting to shrink. ONS agrees that more years of data are needed to draw firm conclusions, especially since the current figures could still change and are partly influenced by the effects of COVID-19. While acknowledging the authors’ concerns, ONS also highlights ways the data can still be useful in understanding regional trends.
New Measures of Public Service Productivity: Lessons and Results from the United Kingdom Richard Heys (Office for National Statistics)
- Since the early 2000s, governments like the UK’s have been working to better measure how productive public services are. A major review completed in 2025 introduced new, internationally relevant methods for doing this, especially in light of the COVID-19 pandemic. These methods show that public services can become more or less productive depending on investment and stable funding. Using the updated approach, UK economic growth since 1997 could have been 0.1 percentage points higher annually, driven by higher public sector output growth of around 0.5 percentage points per annum. This challenges the old belief that public services are inherently non-progressive. The findings come at an important time, as global standards for measuring national economies are being updated.
De-industrialization and the Great Productivity Slowdown: What Comes Next? Paul Fisher (National Institute of Economic and Social Research)
- Productivity growth has been slowing across advanced economies for a long time, not just since the 2007–09 financial crisis. This article argues the slowdown is part of a long-term shift as economies move away from manufacturing toward services and digital sectors. It argues that how we measure productivity still focuses too much on manufacturing and suggests that we stop trying to revive old industries and instead invest in future-oriented areas like digital infrastructure, health, education, and green technologies. These changes can boost well-being and may help slow the decline in measured productivity.
Additional articles
The Challenges of Productivity Measurement — Review Article on The Measure of Economies: Measuring Productivity in an Age of Technological Change Chad Syverson (University of Chicago)
- This article reviews a book tackling the topic of how we measure productivity. Written by leading experts, it brings together a wide range of insights – both theoretical and practical – on current challenges and better ways to measure productivity. According to Syverson, the book is useful for researchers, analysts and anyone working with productivity data, whether they’re new to the field or experienced. The book offers valuable guidance for improving how productivity is understood and tracked.
