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In conversation with Andrew Hodgson: Even a small rise in productivity has a big economic impact

Boosting productivity is one of the key economic challenges of our age and is an issue the North East Local Enterprise Partnership is setting out to help tackle through the launch of a new pilot programme.

Growth Hub High Performance collaborates with senior business leaders to develop and deliver strategy and business models that drive higher levels of performance, profitability and competitiveness.

Delivered through the North East Growth Hub, the scheme will help companies learn from senior business leaders through specialist performance coaching, peer driven workshops and best practice visits.

The pilot programme supports the LEP’s pledge to create more and better jobs for the regional economy – better quality jobs being driven by better productivity.

If all businesses raise their productivity performance, even by only a little, the economic impact will be significant.

Poor productivity is holding back the growth of the UK economy as a whole and is the subject of much debate amongst business leaders, Government ministers and economic analysts.

A landmark recent report by Sage and Nesta into small and medium-sized businesses in the UK, mapped entrepreneurs at a local authority level for the first time.

‘The State of Small Business’ showed a postcode lottery in productivity levels – with SMEs in the most productive local authority in the UK 26 times more productive than those in the least.

Such a patchwork of performance is not good news for a national economy ranked the least productive of the G7 nations.

If businesses are not helped to be more productive then their profit margins will be squeezed, they therefore can’t pay people more and living standards will fall.

Companies become less competitive and less profitable which ultimately slows both business and economic growth.

Greater productivity is a challenge set down in the region’s Strategic Economic Plan as one that the North East must meet as a priority to bridge the widening gap we have with the UK’s productivity level as a whole.

Helping companies to become more productive is widely recognised as being a catalyst for economic growth, higher wages and greater competitiveness.

To tackle this challenge, the North East LEP is working with the industry lead Productivity Leadership Council, chaired and formed by Sir Charlie Mayfield in 2015.

Businesses learn best from other businesses so our approach in the new Growth Hub High Performance programme is structured around best practice sharing between peers.

It will introduce participants to exemplar firms from across the region, as well as providing access to the practical tools and techniques that can be used to implement improvements.

The programme is structured around the key drivers of high performance such as future planning, leadership, talent development and the adoption of digital technology.

The High Performance programme isn’t for everyone; it’s specifically aimed at senior leaders from businesses with between ten and 50 employees. Critically, participants must have a strong desire to transform their company’s performance and be prepared to dig deep and fully participate in this short yet challenging programme.

It is structured around four, full day, peer driven workshops which begin next month.

For more details go to www.northeastgrowthhub.co.uk