Low productivity is possibly the most important challenge that the UK economy faces because it affects the living standards we can sustain. Against this background, the disappointing productivity record of many UK businesses has provoked significant concern amongst policy, academic and business communities. The factors contributing to this picture remain the subject of debate. Much can be learned from careful investigation of firm-level micro data. Indeed, many of the central questions in the productivity debate are impossible to answer without detailed firm-level data. Our objective is to contribute to the evidence base by developing tools that allow us to produce firm-level measures of UK firms’ management practices, uncertainty and forecasting ability and that allow us to improve understanding of the causal relationships between management practices and productivity.
This study is carried out in collaboration with ONS researchers, including at different times Anna Ardanaz-Badia, Gaganan Awano, Russell Black, Ted Dolby, Emma Hickman, Josh Martin, Jenny Vyas and Philip Wales. We have developed a survey of UK businesses (the MES), which will provide longitudinal and internationally comparable information on firms’ management practices and expectations. Using linked information from administrative data and other ONS surveys, this allows us to explore the causal relationships between management practices and productivity, including the role of management in determining business responses to uncertainty and Covid-19. We augment the evidence on business responses to Covid-19 using information gathered from business websites, news and earnings reports. The MES also forms the basis for a set of randomized control trials to study the effects of management training on firm behaviours; this part of the project is being carried out in collaboration with Be the Business. We explore the factors that affect staff satisfaction and performance using information gathered from employee reviews of their employers.
This study is funded by the ONS and the Economic and Social Research Council (ESRC). ESRC support is via their investment in “Transforming Productivity, Management Practices and Employee Engagement” and the UKRI Covid-19 projects.