Regional business leaders’ views of how to improve productivity and future trading conditions for the coming months were debated at the launch of the Chamber’s Quarterly Economic Survey (QES) in Durham.
Mauricio Armellini the Bank of England North East agent set the scene which was marked by UK growth slowing over the past year.
He explained there was weakening global growth and an increasing amount of protectionist measures now in place around the world, which was restricting international trading.
In his view GDP growth was volatile as a result of Brexit related factors and associated uncertainty creating a drag on UK productivity growth.
Also speaking at the launch was Richard Harris, of Durham University Business School which sponsors the QES publication.He raised some thought-provoking points on how productivity was calculated and suggested there may be better ways of measuring all inputs rather than the usual focus on the purely labour element.
His view was that a more useful analysis of productivity would be to identify what drives productivity and what is behind businesses with high levels of productivity.
He said the North East needs to have more firms to be at the frontier of high productivity and then help those at the tail of it, to move up and learn from the leaders.“Capitalism works by churn.To be efficient this type of economy has to have a supply of new businesses and also see some fail to constantly evolve, develop and grow.
“Innovation is an important part of creating a productive economy.”
In his experience companies who invest in innovation are often highly efficient.An example cited by him was Apple which manufactures its products in China, which is cost-effective for them but it also ensured other elements were delivered in California.
Concluding his presentation he said unlocking the secret of high productivity was a key factor in our regional long term growth.