A Call to Enterprise: We Need to Challenge the ‘Productivity Puzzle’

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Its official – the UK economy needs businesses to increase efficiency. Recessions during the 80’s and 90’s saw productivity fast surpass pre-crash levels once the economy had found its feet again, yet since the 2007 crisis there has been a collective struggle to find new momentum. The UK’s ‘productivity puzzle’ is one of the most important challenges facing British business today.

Many of Britain’s most influential organisations, including The Treasury, the Institute of Directors and the Confederation of British Industry, have voiced real concern and called for action to be taken. Solutions to support increased productivity have been identified to include skills development, the introduction of innovation, making scaling up more accessible, and exploring the opportunities for exporting.

 Small businesses, which account for almost half of all UK private sector revenue and 60% of all private sector jobs have a huge role to play in solving this puzzle. George Osbourne calls it ‘Fixing the Foundations’ in his plan to promote change, but the real work that will drive this change can’t come only from Westminster or Europe.

In 2015, the NEN conference highlighted the importance of encouraging a more entrepreneurial Britain to support a change in productivity. Simon Devonshire highlighted that enterprise work should do more than simply facilitate entrepreneurial activity, and that it is in our interests to promote the importance of more scaling up, more exporting and more innovation. We believe enterprise organisations can support the change by encouraging entrepreneurs to be thinking smarter and thinking bigger.

In our work with start-ups and SME’s, at ground level through PNE Enterprise and within the CSR programmes we support, our ambition is not simply to empower people to put the wheels in motion, but to cultivate the potential of the entrepreneurs and their businesses, whether that means improving performance through skills, championing innovation or highlighting space within a value chain.

In the hope of stimulating a greater understanding of how to improve productivity and to make a needed impact on the UK’s economy we encourage entrepreneurs to explore the following:

Developing Skills

What are the skills we will need tomorrow? There may be sector specific skills or qualifications which are relevant, and increasing these specialist skills often pays huge dividends, for example supervision and digital skills in particular are often overlooked.  By selecting someone on the team to take a lead in this area as part of their role businesses can start building the foundations of the future.


Exploring the potential of exporting supports business revenues and the UK economy. Many small businesses don’t consider the option. The first step is simple, by visiting the UKTI website (www.ukti.gov.uk), businesses can view the potential demand for their product and even sign up for alerts of business opportunities in their sector.

Becoming more entrepreneurial

A discipline like any other, with the simplest approaches often being the most effective. Setting aside time to focus purely on the future, or updating a business plan by consulting with existing customers about their future needs is an effective way of keeping an edge on the competition and capitalising on a business’s potential.


Understanding how to improve one small part of a business has the potential to make a huge difference to future success – and profits. Innovation doesn’t have to mean reinventing the wheel, something as simple as rethinking payment, delivery or invoicing processes can drive up margins.

We believe talking about best practice is one of the most effective ways to support productivity in the UK. Take part in the conversation and share your best tips on twitter with the hashtag #smeproductivity.

My own best tip? Supporting the people who manage others to improve their skills can be very effective, and even in organisations which are fortunate enough to have a very ‘light touch’ management style, encouraging managers to develop coaching skills can pay huge dividends in team productivity.