Sheffield university to join new productivity research institute that could create better UK jobs

The £32 million Productivity Institute is intended to advance knowledge and help inform significant decisions by governments and business leaders that can increase the nation’s productivity.

Research from the new facility aims to improve living standards for people across Sheffield and the institute received £26 million investment from the Economic and Social Research Council (ESRC) – as part of its largest ever single investment in social science.

Nine other partner institutions including the University of Sheffield will contribute £6 million towards its funding over the next five years, starting from September 1.

The Productivity Institute which will be based at the Alliance Manchester Business School, will be led by Professor Bart van Ark and includes 40 co-investigators who are known as experts in their fields.

Science Minister Amanda Solloway commented: “Improving productivity is central to driving forward our long-term economic recovery and ensuring that we level-up wages and living standards across every part of the UK.

“The new Productivity Institute will bring together the very best of our researchers, boosting our understanding of the different drivers of productivity and helping people and businesses earn more in every area of our economy.”

Professor of Urban and Regional Economics at the University of Sheffield Phillip McCann said: “We will be working with partners across the Productivity Institute led by Manchester, alongside researchers at the National Institute for Economic and Social Research, Oxford Brookes and other centres in order to build the evidence base.

"This knowledge will also prove invaluable for better understanding the economic drivers of our own Sheffield City Region, and ultimately improving living standards for local people.”

Professor Bart van Ark, director of the new institute at Alliance Manchester Business School, commented: “For many years the UK has grappled with how to create better jobs and boost productivity, thereby increasing people’s prosperity around the country.

"The Covid-19 recession makes it time for a fresh look at these challenges.

“If we are to reboot the economy we need jobs that create high value, use economic and natural resources efficiently, and drive sustained growth through technological change and innovation.

"Productive jobs will pay more and improve people’s well-being.

“Working closely with businesses, policymakers and other stakeholders across the nation, and learning lessons from other countries, we aim through our research and engagement to develop practices and policies to encourage more productive and inclusive growth across the UK.”

Productivity is a measure of how well a society transforms work and other resources into products and services that improve people’s lives.

Historically, productivity has increased over time with more goods and services being produced for the same level of input of resources which allows living standards to rise.

Since 2007, productivity growth in the UK is thought to have stagnated, if it had grown in line with its previous trend the economy would be approximately £300 billion larger today. The nation’s productivity is alleged to be up to 20% lower than in countries such as France, the United States and Germany, according to some estimates.

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