NatWest today unveils research, conducted by Cebr, which reveals businesses in Wales could add up to £1.36bn a year to the UK economy if they introduced a series of productivity improving measures.
Productivity in the UK is under increasing scrutiny following the latest ONS figures, which identified a 0.5% fall in productivity in the first quarter of the year.
Despite this productivity gap, NatWest’s research found SMEs in Wales are uncertain about the actions they need to take to boost business productivity. Even though almost two thirds (60%) of SME decision makers in the region believe improving productivity is important, two-fifths (41%) don’t know what productivity means in practice, making it difficult for them to identify the steps to improve.
NatWest’s research, ‘Addressing the regional and sector productivity gap’, analysed the productivity of SMEs around the UK to identify potential changes SMEs can make to improve their productivity. Despite the significant potential gains for the Welsh economy, the research found that Brexit and political uncertainty mean tackling productivity falls to the bottom of a list of key business priorities, and just one fifth (21%) of businesses which see productivity as important, have targets in place to improve productivity.
To help SMEs in Wales understand how they can improve productivity, NatWest and Cebr identified the following measures with the biggest impact:
Investing in employee benefits packages, technology and equipment and workplace culture were the measures most likely to have the greatest impact on improving productivity in Wales. Despite this, just over a third (37%) of SMEs in the region said that they invest in technology and equipment, and only one quarter (25%) said they invest in their workplace culture. Similarly, just one quarter (25%) invest in employee benefits packages above the statutory minimum.
In terms of potential gains for the local economy, Wales has the second smallest productivity gap. The region with the least to gain from productivity improving measures is the North East (£1.10bn).
Adrian Aurelius, Chair of the NatWest Cymru regional board, said:
“From talking to hundreds of our business customers every year in Wales, we know that many small to mid-size businesses struggle to understand how best to improve productivity. That’s why we’ve commissioned this research to better understand the productivity landscape and source best practice in this area to share with our customers.
“It’s crucial that banks, Government, and business leaders tackle this problem head-on, and start putting measures to improve productivity into practice. Our NatWest Productivity Blueprint, created in partnership with business leaders across the country, will help our customers identify what measures they can put in place to improve their business’ productivity and performance.”
Further help can also be found on the NatWest Business Hub launched last month. The Hub provides insight on a wide range of topics, including cashflow, exporting, productivity, e-commerce and keeping safe from scams, to businesses of all sizes and sectors, through editorial articles, videos, podcasts and access to webinars and events.