Last month we told how the Brits lag behind our main economic competitors in terms of productivity. The Germans produce 14 per cent more than us, per hour worked, the workers of the US produce 18 per cent more than us, and the French 20 per cent more.
Now one can theorise to explain these differentials, especially the differential with France. One theory is that the French actually work more hours than they are officially saying, it’s just that French labour law forbids them from working more than 35 hours a week. (35 hours a week - wouldn’t that be nice - ed.)
Another theory is that French labour law is so restrictive, that employers only take on new staff if there is a very good reason to do so. If you like, the full employment level in France is set at a level that requires a higher marginal physical level of productivity.
But even so, 20 per cent more productive than the UK, that’s a big difference.
The Centre for Economic Performance at the London School of Economics, which produced the productivity report, put the UK differential down to a number of factors: low UK investment on RD, which is slowly being corrected by RD tax credits, the level of family-owned, and therefore inflexible businesses, planning and regulatory problems holding back the size of specific retail outlets - creating inefficiencies, but the big one was the E word - education.
Apparently, the UK now spends 5.6 per cent of its GDP on education. That’s near to the OECD average, and up from 4.8 per cent in 1987/88.
But, let’s just assume for a moment, that half of the productivity gap with France is explained by education. Now assume that if we were to double our education expenditure we would eventually have a work force which is just as well educated as the French. Based on the above assumptions, this would mean our productivity would improve by 10 per cent, leading to a 10 per cent jump in GDP. So that’s an extra 5.6 per cent of GDP on education, leading to 10 per cent increase in GDP - it’s a good return.
That’s not to say money is the only answer. Some say we just need to leave education alone, that its the constant need to tweak, and then change altogether, that is creating inefficiencies.
But what is quite interesting, is the way the French place different emphasis on maths. In France, the maths Olympics are popular and, apparently, the French, Russians and Chinese lead the field - with the Indians typically in fourth place.
In the UK, we just don’t seem to care about maths. Scrabble is a popular board game- in the TV show Countdown, maths is a small part of the puzzles, it’s the word puzzles and conundrum that take up most of the time.
In the UK, if you say “I was never any good at maths” people tend to laugh and say things like “know the feeling”. It’s as if there is status in not being good at maths.
But in the future, it seems that education will be ever more important in determining a country’s economic success. If the UK is to increasingly rely on its services sector, then we need to be aware this is a sector with relatively low barriers to entry, we could lose our pre-eminent position, quite easily.
Education today is not just below the level we would like, or need, it is woefully below that level. We need to re-think the priority we attach to education. Think of a number between one and ten that describes the importance you think education should have in our economy. Now double it; only then are you likely to be close to the mark.
So, what do you think? Agree or disagree? Tell me what you think on the editor’s blog at Find.co.uk
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