The North West of England’s Productivity Challenge: Exploring the issues

This report provides a state-of-the-art overview of the productivity performance in the North West of England. It finds that the average level of productivity in the North West lags the national average, and for most sub-regions the gap has been widening in the past decade. The primary reasons for this shortfall relate to underinvestment by the public and private sectors in key growth drivers such as hard and soft infrastructure, R&D activity, and human capital. Long-term scarring from the North West’s industrial decline is undoubtedly a key factor as well. When the region’s economic revival began in the 1990s it was built on weak fundamentals. Local institutions (including local enterprise partnerships, local authorities, and combined authorities) do not have the revenue or capital budgets comparable to the scale of economic challenges faced.
The region’s fragmented economic geography and lack of critical mass is also a factor. The report argues that the North West’s productivity challenges cannot be delivered with the same historical approach. It will require a sophisticated mix of coordinated policies (incorporating education and skills, R&D, innovation, health, planning, transport, investment and a host of other areas) and long-term commitment that respond to the specific local circumstances. Key priorities should include the following of a digital transformation to support a technologically diverse, sustainable and productive economy.