It’s off to work we go this summer, according to Will Mooney, Carter Jonas partner and head of commercial in the eastern region, as he considers the difference between being in business and being productive
It is a truth universally perceived that nothing happens in the summer months. It is, apparently, a ‘slow news’ time. Great. So there’s nothing going on in Greece, Syria, Turkey or, closer to home, with welfare reform or the Labour Party’s leadership race that’s been worth reporting or commenting on during July and August will see little of substance to report either? If only it were so.
Clawing back from the weighty economic and political scene, I know that with the exception of a two week break away from the office – but not work, necessarily - my summer will continue to be as busy as the rest of my year and as so it is for most business peers.
But is being busy the same as being productive?
Not if recent reports hold true. The UK’s productivity levels are a fifth lower than the G7 countries’ average. In a post-recession position this should not be the case, it seems. Some commentators point out that the recessions of the 1980s and early 1990s burst forth in to a time of increased productivity, fuelling innovation and growth.
At this point, we have to acknowledge our fortuitous position in the East of England in being a location where innovation is the main driver of business activity - whatever the wider economic picture.
The UK economy is acquiring form for underperformance. Called the ‘productivity puzzle’, there are ongoing efforts to try and unpick the reasons why.
One strand involves the examination of the methodology and definition of ‘productivity’. In an age where much business is based on knowledge, data and information in providing services, it may no longer be credible or useful to measure ‘productivity’ in the way it can in economies where industry and manufacturing dominate.
Greater minds than mine are charged with considering how advice and services which, eventually, lead to revenue generation can be calculated and judged against conventional measures of productivity.
Indeed, is it even relevant to judge productivity in a complex world where social and business time and networks mingle? Many a coffee shop brainstorm session has brought forth an idea which, down the line, has resulted in revenue generation for many parties – not least the coffee shop owner.
How can we measure the contribution of the cappuccino to productivity? Yet without that setting and stimulant, the idea which eventually resulted in money being made might not have occurred.
It’s an over-simplification of the modern productivity puzzle but it illustrates the complexity of a business life away from a manufacturing setting where input versus output can be assessed more easily.
Another view of the puzzle suggests that the poor productivity can be blamed on quantitative easing (QE) and low interest rates.
This view argues that many businesses are only around post-recession because of the ‘easy money’ supplied by QE and the perpetuity of low interest rates. In to this mix comes the tolerance of lenders who, mindful of an atmosphere of bank-bashing, have been reluctant to pull the rug from under these unprofitable and unproductive businesses when they really should have done so.
In this view, as long as these ‘zombie companies’ have been able to service their debt, they have survived and have held back the natural innovation and productivity surges which should occur post-recession.
With the Bank of England, for the second year in a row, making mid-summer murmurings of interest rate rises in the not too distant future, perhaps August is a actually a good time to bury what will be bad news for some.
It is a truth universally perceived that nothing happens in the summer months. It is, apparently, a ‘slow news’ time. Great. So there’s nothing going on in Greece, Syria, Turkey or, closer to home, with welfare reform or the Labour Party’s leadership race that’s been worth reporting or commenting on during July and August will see little of substance to report either? If only it were so.
Clawing back from the weighty economic and political scene, I know that with the exception of a two week break away from the office – but not work, necessarily - my summer will continue to be as busy as the rest of my year and as so it is for most business peers.
But is being busy the same as being productive?
Not if recent reports hold true. The UK’s productivity levels are a fifth lower than the G7 countries’ average. In a post-recession position this should not be the case, it seems. Some commentators point out that the recessions of the 1980s and early 1990s burst forth in to a time of increased productivity, fuelling innovation and growth.
At this point, we have to acknowledge our fortuitous position in the East of England in being a location where innovation is the main driver of business activity - whatever the wider economic picture.
The UK economy is acquiring form for underperformance. Called the ‘productivity puzzle’, there are ongoing efforts to try and unpick the reasons why.
One strand involves the examination of the methodology and definition of ‘productivity’. In an age where much business is based on knowledge, data and information in providing services, it may no longer be credible or useful to measure ‘productivity’ in the way it can in economies where industry and manufacturing dominate.
Greater minds than mine are charged with considering how advice and services which, eventually, lead to revenue generation can be calculated and judged against conventional measures of productivity.
Indeed, is it even relevant to judge productivity in a complex world where social and business time and networks mingle? Many a coffee shop brainstorm session has brought forth an idea which, down the line, has resulted in revenue generation for many parties – not least the coffee shop owner.
How can we measure the contribution of the cappuccino to productivity? Yet without that setting and stimulant, the idea which eventually resulted in money being made might not have occurred.
It’s an over-simplification of the modern productivity puzzle but it illustrates the complexity of a business life away from a manufacturing setting where input versus output can be assessed more easily.
Another view of the puzzle suggests that the poor productivity can be blamed on quantitative easing (QE) and low interest rates.
This view argues that many businesses are only around post-recession because of the ‘easy money’ supplied by QE and the perpetuity of low interest rates. In to this mix comes the tolerance of lenders who, mindful of an atmosphere of bank-bashing, have been reluctant to pull the rug from under these unprofitable and unproductive businesses when they really should have done so.
In this view, as long as these ‘zombie companies’ have been able to service their debt, they have survived and have held back the natural innovation and productivity surges which should occur post-recession.
With the Bank of England, for the second year in a row, making mid-summer murmurings of interest rate rises in the not too distant future, perhaps August is a actually a good time to bury what will be bad news for some.
Will Mooney MRICS
Partner
Commercial, Cambridge
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