Britain has a lot of catching up to do when it comes to technology, and that’s hurting productivity and pay.
U.K. businesses are almost a decade behind Denmark in the adoption of new technologies such as cloud, e-purchasing and cyber security, the Confederation of British Industry said in a report published Monday. By being more open to employing “tried and tested” innovations — and improving management practices — companies could add 100 billion pounds ($132 billion) to the economy and help reduce income inequality by almost 5 percent, the lobby group said.
Poor productivity has long been the bane of the U.K. economy, with output per worker at the bottom of the Group of Seven rankings. The CBI said the nation also trails behind most of those countries in leadership and management. While the U.K. has more highly productive businesses than France and Germany, they account for just 5 percent on the workforce, with about 70 percent of employees working in below-median productivity firms, it said.
The group cited research from the McKinsey Global Institute saying that in developed countries at least 55 percent of labor productivity growth will come from firms “catching up” to adopt existing best practices. That may please Chancellor of the Exchequer Philip Hammond, who said last month that the fact that Britain lags so far behind its peers could unleash economic growth in future.
The CBI is calling on the government, which announces its budget next week, to ensure proven technologies can reach more businesses and fund local support when needed.