No matter what research says about the UK as a whole, productivity in London is actually pretty good

 
Julian Harris
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The Millennium Bridge Opens
Central London has an impressive level of productivity (Source: Getty)

You may have heard the line about how an average German worker can go home shortly after lunch on a Thursday having already achieved as much as a British worker produces up until Friday evening.

Whether or not this anecdotal picture is perfectly accurate, the truth – at least according to official government statistics – is that UK productivity lags the G7 average by around 15 per cent.

The figures are depressing, and indeed baffling to many employees who, travelling to work for another hard day’s toil, must wonder how on earth their efforts appear to be so inefficient.

Digging into the data provides an element of comfort, at least in this corner of the country.

Read more: Low interest rates and high public spending drag down productivity

An excellent study published last month by a research group at the London School of Economics looks at the differences in economic activity in varying parts of the UK.

The findings are intriguing and sometimes betray conventional wisdom. For instance, the financial sector spans a greater section of the UK than generally thought, and is “far less London-centric than the creative industries”.

Less surprising is central London’s impressive level of productivity – the city is the only part of the country to match German rates of output per worker.

There are other pockets of high productivity, of course; in Greater Manchester, for example, and around Aberdeen where the energy industry continues to plug away despite low oil prices.

Read more: How the UK can plug the productivity gap

Another is the corridor heading west from central London towards Bristol. This “band” is “the UK’s productivity engine”. Separate statistics that chart productivity levels specifically among SMEs also reflect strength in the area immediately west of London.

Those are the bright spots. Throughout much of the rest of the UK productivity levels are extremely poor. However, the mere existence of bright spots shows that we do not necessarily have to look abroad to examine the factors behind highly-productive local economies. Indeed, country-by-country comparisons can be blunt and misleading; regional disparities occur everywhere, especially in Germany where parts of the east remain extremely unproductive with low levels of growth.

There is no easy solution to Britain’s productivity puzzle, but by looking closely at the complexities, rather than relying on generalisations, it must be possible to find some answers.

Read more: Data skills will solve Britain’s productivity puzzle

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