This project aims to shed greater understanding of labour productivity in the West Midlands government office region and the areas within it.
Productivity growth can allow for higher incomes and improved living standards and so it is central to levelling up the region.
The findings of this paper should help guide policy makers to policy areas that are most likely to drive productivity growth in the West Midlands.
Research Theme 2
Firms and Industrial Demography
This report focuses on bringing together readily available ONS data to better understand the labour productivity gap in the West Midlands.
This report focuses on labour productivity – which measures how much output is produced per unit of labour input. There are varying measures of labour input, determined by data availability. Ideally the measure should reflect what actually goes into the production process – it should be based on actual hours worked and quality adjusted (for skills, education, experience levels etc.). Readily available estimates are often not produced to this ideal. The labour productivity data used herein are not quality adjusted and use a mix of hours and more simple measures of per worker or per filled job. In reality, using hours or workers as the productivity denominator often makes little difference to the growth in productivity observed or the relative productivity picture across the UK.
Melisa Wickham, Associate Director - Hatch.
Rebecca Riley, Associate Professor for Enterprise, Engagement and Impact at the University of Birmingham, City-REDI/WMREDI.
Information for Policy Makers
Growth in productivity means an economy can produce more without needing to use more inputs. As such, it is one of the most fundamental drivers of improvements in living standards, allowing people to enjoy more, or better quality, goods and services.
Historically, productivity has grown steadily over time, allowing real (i.e. adjusted for inflation) wages and living standards to follow suit. Since the 2008 financial crises, however, productivity growth has diverged from its long run trend, and stagnated – the reason for this change in trend is what is known as the ‘productivity puzzle’.
City-REDI Podcast- Productivity in the West Midlands
, Rebecca Riley, Associate Professor and Charlotte Horobin, Regional Director for the Midlands and East of England, Made UK.