£88 million to help unleash the productive power of the UK economy
Productivity of UK businesses is set to be supercharged with £88 million in new government investment through the Strategic Priorities Fund.
Levels of productivity across certain sectors in UK manufacturing, like aerospace, are among the highest in Europe, but overall UK productivity still lags behind major global economies and certain sectors, including chemicals and textiles, find it harder to grow.
By adopting new technologies and more efficient business practices, the productivity of businesses, particularly small ones, could be increased. This will help them to scale up and expand into new markets – boosting competition and ultimately benefiting consumers with lower prices or better quality products and services.
Business Secretary Andrea Leadsom said:
“Productivity matters – if we produce more, we can earn more, as individuals and as a society.
“Today’s investment will allow us to develop pioneering software to harness the power of supercomputers and create a state-of-the-art Productivity Institute.”
New productivity institute
£43 million in government investment will support top researchers and analysts to explore how to turbocharge UK productivity levels through a new ambitious productivity institute; tackling barriers such as productivity imbalances between sectors and regions, poor management practices and skills investment. The new institute will be delivered by the Economic and Social Research Council (ESRC).
Experts will work closely with businesses to power the UK towards a more competitive and resilient economy, as well as the public sector and policymakers, aiming to deliver benefits for both businesses and consumers. Increased productivity can drive up wages, lower prices of products and improve working conditions.
Professor Jennifer Rubin, Executive Chair of Economic and Social Research Council, said:
“Raising productivity is arguably the greatest economic challenge of our time, and is needed to increase wages and living standards, and to ensure benefits can be spread across sectors and regions.
“This significant investment in understanding what will drive improvements in productivity is an important opportunity for research to make a contribution to improving quality of life and economic performance.”
Cutting-edge supercomputer software
A further £45 million will be specifically invested by the government into the development of cutting-edge supercomputer software, set to transform whole sectors from agriculture and advanced aerospace to Formula One and pharmaceuticals with hyper-accurate weather predictions – helping them plan come rain or shine and in turn boost their productivity.
Delivered by the Engineering and Physical Sciences Research Council (EPSRC) and the Met Office, this radical development could mean businesses will receive up-to-the-minute weather forecasts, so they are not ‘caught in the rain’ and can focus on delivering their products and services effectively and efficiently. This knowledge could help farmers protect crops for consistent food supplies, help airports keep flights running - and businesses can foresee the impact on infrastructure that cause downtime like flooding, for example.
Named ‘ExCALIBUR’, the project will ensure the UK can meet the scientific and engineering challenges of the future with maximum efficiency and safeguard future industry productivity.
Met Office Director of Meteorological Science, Simon Vosper, said:
“The ExCALIBUR project will establish a national capability in scientific computer software that mirror the real world, accelerating advances in a wide range of important areas that rely on cutting edge computer technology: from climate prediction to drug research and nuclear fusion.”
The £88 million funding forms part of the government’s Strategic Priorities Fund (SPF), and follows the government reaffirming its commitment to invest at least 2.4% of GDP in R&D by 2027. The government has made making boosting productivity and increasing earning power a priority - making the most of untapped potential right across the UK.
The Strategic Priorities Fund supports high quality multidisciplinary research and development priorities.
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