Productivity Gap Between The Uk And Its International Comparator Nations

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Introduction This report will look at the productivity gap between the UK and its international comparator nations. The productivity gap is the phrase used to describe the difference in productivity of two nations. The findings and recommendations of the Leitch Review of Skills 2006 will be discussed comprehensively, and used as a base for further analysis of the productivity gap. I will also explore the action Government and businesses can take to increase productivity. Overview of the Leitch Report In 2004, Lord Leitch was asked by the UK Government to compile a report detailing what should be done ‘in order to maximise economic prosperity, productivity and to improve social justice’ (Leitch, 2004). Leitch looked at British skills and…show more content…
Moreover, even if the 2006 targets aiming to improve skills were to be met we would still lag behind comparator nations. ‘There is a direct correlation between skills, productivity and employment’. He continues, ‘As a result of low skills, the UK risks increasing inequality, deprivation and child poverty, and risks a generation cut off permanently from labour market opportunity.’ (Leitch 2006:4). The report called for dramatic improvements, with the overall aim of making the UK a global skills leader by 2020. In order for this to be achieved attainment levels would have to be doubled almost completely across the board. These objectives include; increasing attainment of basic English and Maths skills to 95% in adults, increasing the percentage of adults with level 2 skills over 20%, from 69% in 2005 and increasing the number of adults with level 4 qualifications to 40% from 29% in 2005, with a commitment to continue improvements. (Level two skills involves holding five good GCSE’s. Level three skilled workers must hold at least two A levels. Level four skills equates to a degree or other vocational skills.) Productivity Gap The productivity gap is defined as ‘the ratio between the productivity of a benchmark country (such as the United States) and that of a less developed economy.’ Productivity is a key economic indicator and thus such a long-term short
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