Quiet quitters are costing the UK economy $400 billion in lost productivity? The only surprise is that people find this a surprise. Successive governments approach to solving the issue has been to paper over the cracks and not address the glaringly obvious - deterrents (like cutting benefits) don't work if people don't benefit from the incentives (like tax breaks). Most people have experienced something like a ~20% real terms pay cut over the past 15 years. All the inflation post-GFC was hidden on bank's balance sheets. Once they had to pump money into the real economy (COVID), inflation soars and wages went up as a result. And that's not throwing in the x-factor of AI. There's predictions out there of super-human AGI in less than 5 years. So to summarize - get pushed into work that doesn't pay enough to cover the cost of living/rapid inflation and if you manage to get your head above water, the Terminators will likely come and take over the work you do anyway. Wonderful. $400 billion is undervaluing the problem.

Just got this feedback from a UK investor, "[Forecasted] revenue growth seems very high and for a UK company". Ok, the numbers might be a little ambitious, but "for a UK company"? Ouch. If this guy had asked, he would have learned that we're majority focused on US-driven growth. The market is global, but most of it is based in the US. Interestingly, this follows on a recent critique I published (link in comments) in which I wrote... "Things here feel small. - Budgets - Mindsets - Ambitions - Investments - Risk appetites - The list goes on" Do I really need to add investor ambition to the list, too? This sentiment is part of a broader, systemic set of cultural and economic challenges plaguing the UK over the past decade, according to today's article in Bloomberg, which notes: "Just one in 10 UK workers were classified as “engaged” at work, which means putting in discretionary effort on the tasks they’re asked to do, according to Gallup research published Wednesday that tracked a slow erosion in motivation over the last decade." If this is right, this is terrible. We can do much better. The opportunities out there are tremendous. Now, to be clear, I'm not new to the software venture build game, so I'm fully aware that more than 9 out of 10 pitches to investors are going to result in crickets or declines, but feedback like I got today is really uncool and unhelpful - not just for entrepreneurs like me, but for the broader economy. https://lnkd.in/eBq2vjyG cc Irina Anghel

New! CEP election analysis on Growth and productivity. John Van Reenen and Anna Valero set out how the collapse in productivity growth underlies many of the problems of the UK economy – from squeezed public services to stagnant living standards, new LSE analysis shows. They point out that productivity growth in the UK has been weak relative to its own past and to its international peers, and that improving productivity is the only route to sustainable improvements in overall growth and living standards. The CEP election analysis shows that the UK’s poor productivity performance relative to other countries is mainly due to low capital accumulation against a backdrop of low levels of both public and private investment. One reason for this low investment has been frequent policy changes leading to volatile public investment and an uncertain climate for businesses. Read: https://lnkd.in/eiSbaAfv

The economy remains the top priority for voters in this election. With average real wages stuck back at close to 2010 levels, it's not hard to understand why. Last month, the The Productivity Institute and the Royal Society of Edinburgh discussed how to turn around Scotland's - and the UK's - weak productivity growth. A key insight is the weak performance of our 'average' and slightly 'above average' companies. And how it is this group of firms that help explain why the UK has been lagging behind. Politicians and policymakers often look for the next 'big idea' to transform productivity. But for the vast majority of our businesses, improved productivity will be less about discovering the latest technology or innovation, but operating in an environment that helps them adapt to change, adopt and commercialise the use of new technologies, supports and encourages them to improve their leadership and management structures and provides the right form of finance (and at the right time). And it'll be about operating in a less fragmented policy world. 👇 https://lnkd.in/eaV9DFyk

🚨 UK’s Lost Productivity: A 25% Gap! 🚨 If British productivity had kept pace with the pre-2008 trend, we'd be 25% higher today. Imagine the missed opportunities for wages, innovation, and growth. Instead, we've been stuck in a decade-long stagnation. 📉 If we'd stayed on track with pre-crisis productivity trends, the typical family could be £8,700 better off today! 💸 Meanwhile, tax revenues would be up by £1,282bn. And it doesn't stop there—if we'd stayed on the productivity path, we'd be looking at a £170bn surplus instead of deficits. That’s more funding for schools, hospitals, and infrastructure. This isn’t just about numbers—it's about real lives, real opportunities, and a stronger future for everyone. What’s next? We need bold action to reverse this trend, we need strategic investments in skills, innovation, and infrastructure. Focusing on growth sectors and harnessing new technologies like AI could help us climb back to a more robust growth path. #Productivity #UKEconomy #GrowthMindset #Innovation #FutureOfWork #Leadership

Productivity, Productivity, Productivity The UK is alone among major economies in having fewer people in work than before COVID-19 and there is a skills shortage. The Institute for Public Policy Research (IPPR)has also said that total investment in the UK is "significantly" behind the nearest competitor in the G7 group of wealthy nations. Not good news. However, there are lots of things that are under your control that will increase engagement and productivity and can be implemented in the short term. Don't accept average. Contact me if you want to discuss the process of improving engagement and productivity. #dontacceptaverage #productivityimprovement #staffengagement https://lnkd.in/eScgqP8r

This is food for thought as I start working on my 2025 forward look. I think this is one of those absolute gems of a piece. I am quite a fan of Giles, and he doesn't disappoint. While start-ups, sector development and other issues remain, the problem is the loss of dynamism—70% of UK workers are in firms with below-average Labour productivity. When you combine that with the steady erosion of household consumption because of higher prices, you get the problem: going for growth won't help unless you can distinguish between place-based intervention and sector development.

“Over half a million UK businesses fighting for survival as UK economy stagnates” reads the latest report from Begbies Traynor Group 📈“554,554 UK businesses now in 'significant' financial distress - a 30.8% rise compared to Q1 2023” Businesses have ‘loaded their balance sheets with unaffordable levels of debt’. Given inflation and interest rates this is obviously unsustainable for many businesses. 🤒 Also of note is a recent ONS report stating approximately 3 million people between the ages of 16-64 are out of work due to long term sickness. This translates to billions of hours lost each year in terms of output! Considering that factors such as inflation, interest rates, long-term illness, heightened competition, regulation, and economic uncertainty are beyond a company's control, what concrete measures are in a company’s control to navigate such choppy waters? 1️⃣ Diversification and International Expansion - it’s no longer cost prohibitive or a requirement to set up an overseas entity to get boots on the ground and trade elsewhere in the world. Hiring elsewhere and utilising a ‘distributed and remote workforce’ can also tackle the chronic labour shortages that exist in some UK industries (two birds, one stone). 2️⃣ Flexible Pricing Strategies - making intelligent decisions about pricing, factoring in drivers such as Cost To Serve and analysing profitability to increase sales volumes, recognising elasticity within a market, can be a game changer in competitive industries. Administering a more complicated pricing matrix can be tricky but worth it to avert losses. 3️⃣ Streamline Data Management - and introduce a ‘single source of truth’ approach to applications, processes and data for productivity boosts. Employees are drowning in applications today and so a proactive strategy here makes complete sense in the long term. Ultimately there is lots within our control! And taking a forward thinking approach to the above will put businesses in a fantastic position to leverage the broad consolidation of companies across most industries in the UK. 🌦️🌈

UK FACES "WORST OF ALL WORLDS" AS ECONOMY STAGNATES Britain's economy saw 0% growth between July and September, fueling fears of a recession as businesses slash hiring and growth forecasts. A new survey revealed 899 firms plan sharp employment cuts, with critics blaming Chancellor Rachel Reeves' policies. Conservative spokesman Andrew Griffith accused Reeves’ “tax-raising spree” of creating a “hostile climate for investment and growth.” #UKEconomy #RecessionFears #PolicyDebate

The UK’s productivity problem has persisted for over a decade. Since the 2008 financial crisis, GDP per capita growth has stagnated at just 6%, compared to 20% in the US. It’s clear that incremental changes won’t suffice. The UK needs bold reforms like Japan’s Abenomics or France’s labour market overhauls. Simply increasing government spending won’t guarantee economic growth. Instead, targeted investments, particularly in R&D and public-private partnerships, can drive meaningful change. By focusing on innovation, the UK can unlock long-term economic potential and boost productivity. Recent discussions from policymakers, including Chancellor Rachel Reeves, suggest an emphasis on capital spending – investing in infrastructure and innovation. While this is a positive step, it's crucial to ensure that public investments don’t crowd out private-sector funding. Research shows that public investments in R&D can ‘crowd in’ private spending, creating a multiplier effect where £1 of public funding generates up to £8 in private sector investment. The UK has strong areas of expertise, particularly in services and high-tech manufacturing sectors like aerospace and pharmaceuticals. Prioritising investment in these areas will build on the country’s existing strengths, ensuring long-term, sustainable growth. Yet, the results of R&D investment take time to materialise – often longer than a single parliamentary term. This long-term focus is critical to reversing the UK’s weak productivity performance. I would love to hear a few thoughts, will this government have the foresight to prioritise long-term strategies over short-term political wins ❔ #ukproductivity #economicreform #rdinvestment #growthstrategy #financialplanning #capitalinvestment #economicgrowth #ukeconomy #policyreform