ESRC invests £11 million to tackle productivity puzzle

Researchers are closer to unravelling some of the complex reasons behind the UK’s stagnant productivity, thanks to a new £11 million research investment by the ESRC.

The ERC team at University of Warwick are delighted to be leading one of the seven projects being funded: Mental health and well-being practices, outcomes and productivity: A causal analysis. The project will investigate the impact of employee mental health and well-being on productivity. By adopting an interdisciplinary approach which brings together management studies and occupational psychology, the research will suggest new ways in which employers can support better mental health and well-being and boost productivity performance in a post-pandemic UK. We will be working in partnership with researchers at University College Cork and the University of Nottingham on the study.

The project will start in April 2022 and run for three years. For further info please email Vicki.Belt@wbs.ac.uk

The seven research projects funded as part of this investment will each tackle specific aspects of the so-called productivity puzzle.  The findings will help policymakers and businesses take the steps necessary to improve productivity and raise living standards across the UK.

 ESRC’s Interim Executive Chair, Professor Alison Park, said:

“UK productivity levels have been poor by international standards and have stagnated in recent years.  Funding research to understand the issues driving low productivity continues to be of paramount importance to the Economic and Social Research Council. So we are delighted to be able to fund seven projects that will delve into the reasons behind the UK’s stagnating productivity and provide evidence to help boost productivity and improve people’s living standards. Expanding our research portfolio in this way could ultimately improve the lives of millions of people in the UK, as it is addressing arguably the UK’s biggest economic challenge.”

Summaries of each of the projects being funded are below:

Productivity, Wages and the Labour Market, Professor Sir Richard Blundell, Institute for Fiscal Studies, £1.6m

While employment remains high, many jobs are low quality, offering little security and limited opportunities for learning and progression. This project aims to understand the interactions between skills, jobs and career progression, their combined role in driving inequalities in economic outcomes and their consequences for productivity.

Diversity and UK Firm Performance, Dr Max Nathan. University College London, £1.1m

This project will explore the economic effects of diverse teams and workplaces – and the wider role of urban diversity – on entrepreneurship and firm-level innovation and productivity in the UK.

Diversity and Productivity: from Education to Work (DaPEW) ,Dr Grace Lordan, London School of Economics and Political Science, £1.6m

This project will advance understanding of the barriers to creating a diverse workforce and provide new evidence on the benefits of diversity to business performance. The role of education as the ‘leaky pipeline’ will be considered, in which individuals from under-represented groups lose access to career opportunities, creating a substantial ‘lost potential’ of highly-qualified individuals.

 Understanding how constraints on access to finance and under-investment impact on productivity growth in smaller firms ,Professor Marc Cowling, University of Derby, £1.6m

This project will build a picture of the problems that small firms face accessing investment capital and increasing their productivity. This will enable policy makers and businesses to design new policies that will contribute towards higher rates of investment that can increase productivity growth across the UK.

 Understanding how servitisation can impact UK economic productivity and environmental performance ,Professor Tim Baines, Aston University, £ 1.5m

‘Servitisation’ describes the strategy of creating value by adding services to products or replacing a product with a service. This project will investigate how industry can respond to environmental challenges by being innovative and potentially changing business models.

Productive and Inclusive Net Zero (PRINZ) – Opportunities and barriers in the transition to sustainable and equitable growth , Dr Ralf Martin, Imperial College London, £ 1.6m

This project aims, through multidisciplinary empirical analysis, to inform the growth opportunities and risks of the transition to net zero for UK regions, sectors and occupations through developing new firm, country, region and sector level indicators on innovation and its adoption, together with the degrees of action on climate change.

Mental health and well-being practices, outcomes and productivity: A causal analysis ,Professor Stephen Roper, University of Warwick, £1.7m

This project will investigate the impact of employee mental health and well-being on productivity. By adopting an interdisciplinary approach which brings together management studies and occupational psychology, the research will suggest new ways in which employers can support better mental health and well-being and boost productivity performance in a post-pandemic UK.