UK must be tough to reverse productivity slippage, BCG says

LONDON, Feb 23 (Reuters) - ‌British corporate ​sectors ​that once drove national productivity growth have fallen behind the global leaders and ‌the government's strategy for improvement must be ⁠hard-edged, the Boston Consulting Group, a consultancy, said on ‌Monday.

Policymakers should encourage "creative destruction" ‌of firms that are barely surviving and help workers to move to higher-growth areas, BCG ​said in a report.

Successive British governments have sought to fix the country's weak productivity record. ⁠Prime Minister Keir Starmer has promised to reform planning rules and ​invest more in infrastructure.

BCG said in its report:

* Businesses in manufacturing, information andcommunications ​and financial services accounted for ‌84% ofpositive productivity growth in Britain between 1997 and 2007,but only 34% ⁠in 2019-2024 * The UK's industrial strategy should be focused onsuccessful areas, have "hard edges and be relentlessly focused,rather ⁠than trying to lift growth for all sectors" * The weakest ​firms now produce less per worker than theydid 30 years ago, after adjusting for inflation * The financial services ‌sector has seen little improvementsince the global financial crisis almost two decades ‌ago * Reforms that lower energy prices would help ⁠manufacturing * Specific help for ‌IT and communications ​firms should be inareas such as training, digital skills and innovation

(Writing by William ‌Schomberg)

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