CBI’s ‘£100bn productivity cost’ of UK failing to embrace technology

Failure to adopt technologies leading to big disparities in productivity and pay among British firms, says the employer group

Posted 14 November 2017 by

The UK could release at least another 5% into national coffers if companies started to take technology more seriously – which would translate into another £100bn per year.

That’s the strong claim this week from the CBI, which yesterday published a report, From Ostrich to Magpiewhere it says it’s finally identified the issue “fuelling the deep-seated productivity problems the UK has faced in recent decades” – low take up of readily available technologies and management practices.

In its view, companies need to become more like ‘magpies’ – picking the best tried and tested technologies available – rather than ‘ostriches’, who are more stuck in their ways and averse to taking risk.

For example, it claims, in 2015 the UK was 30% behind the European average in take up of cloud, while the proportion of businesses with e-purchasing, Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) systems in the UK today is still below the levels it was in Denmark eight years ago.

As a result, the CBI argues that government should prioritise diffusion, ensuring that proven technologies – such as cloud, mobile technology, e-purchasing and cyber security – should be pushed out to British businesses through the new Industrial Strategy, funding local business support where needed.

“While the eyes of the business world can often be on ‘the next big thing’ in cutting-edge technology, too many firms are missing out on what’s right under their nose,” warned its Director-General, Carolyn Fairbairn.

“Failing to adopt the nuts and bolts technologies of today is leaving a yawning gap in productivity and pay between businesses… At a time when the public purse is tight, encouraging new technology take-up is one of the most effective routes to raising productivity,” she added.

Commenting on the CBI’s call, Tony Bailey, Head of Regional Business at Vodafone UK, claimed, “The findings in the CBI’s report certainly add weight to growing concerns about the way UK workers get things done.

“It is important, however, that businesses don’t rely on technology alone, because only when it’s coupled with management best practices and flexible and smarter ways of working, can businesses see a lift.”