Brussels, 22 Jun 2004
A new study by the UK Engineering Employers Federation (EEF) claims that investing across the board in new technologies, skills and innovation is the key to improving company performance.
Based on a survey of 600 businesses in the UK, France and Germany, the EEF report shows 'substantial evidence' that investment holds the key to faster growth and increased profitability.
'The survey proves that investing across the board in capital equipment, skills and innovation holds the key to success,' said EEF chief economist Stephen Radley. 'However, even this may not be enough if companies are not making the best use of modern working practices.'
UK manufacturers were found to invest less but innovate more than their counterparts in Europe, but the EEF claims that skills levels within UK firms are of particular concern.
According to the report, the recruitment of apprentices is partly to blame. Indeed, only 40 per cent of the country's businesses have taken on apprentices in the last two years, compared with 70 per cent in Germany and 60 per cent in France.
While companies in the UK have matched France and Germany recently in increased spending on training, skills shortages are limiting the ability of UK businesses to increase productivity in a way that is less apparent in France and Germany, the report continues.
Other factors, including the need to make more effective use of modern working practices such as lean manufacturing and high-performance working, also need to be addressed if the UK is to succeed in closing the productivity gap.
The survey also shows that businesses in the UK appear more inclined than their counterparts in France and Germany to invest in the rapidly growing economy of China. They, in turn, are more focused on the emerging regions of Eastern Europe. To read the full report, please