Can British business schools solve the UK’s productivity puzzle?

24 March 2021

Director of Business School Services Ian Hawkings reflects on the latest UK government incentive to offer SME's MBA-style training.

The UK has a well-documented productivity problem – and the government feels Britain’s business schools can do more to help.

International comparisons show that in one measure of productivity – output per hour worked – the UK has a deficit of 16% compared with the other members of the G7 (the US, Japan, Germany, France, Italy and Canada). When measured against the US and Germany, the gap is more than 20%.

In the latest of many efforts to address this, the government announced earlier this month that the bosses of small businesses are to be invited to business school to brush up on their management skills.

Dubbed the ‘help to grow’ scheme, the idea is that leaders of small and medium-sized businesses in the UK will be offered ‘MBA-style’ management training to spur innovation and growth – as well as offering business owners access to expert technology advice and discounts on digital software.

The chancellor, Rishi Sunak says he expects tens of thousands of small businesses to take advantage of the sort of high-class management training that bigger companies can more easily afford, and was quoted as saying: “Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity – so it’s vital they can access the tools they need to succeed. Help to Grow will ensure they are embracing the latest technology and management training, fuelling our plan for jobs by boosting productivity in all corners of the UK.”

Of course, despite addressing a long-running problem, this is also being packaged as a response to the Covid-19 pandemic. Under the scheme, leading business schools with the Small Business Charter Award run by Chartered ABS will offer 50 hours of tuition with one-to-one support from a business mentor.

In addition to management training, the government will create a new online platform to offer free advice on technology that will help businesses to save time, reduce costs, and reach more customers. Eligible SMEs will be given vouchers to get up to 50% off the purchase of new productivity-enhancing software, up to £5,000 each.

Is this a potential boon to British business schools? Will it help them to ride out the dual-headwinds of the Covid fallout and Brexit (not to mention increasing international competition)? And will it address the productivity problem sufficiently? Or is it destined to be a short-term fix to an entrenched cultural malaise?

Thoughts on a postcard...