UK ahead of G7 on productivity growth

According to the OECD, FDI inflows to the UK have more than doubled in 2009Q1. The UK had the fastest productivity growth among G7 countries over 1998-2008.

A new report by the OECD shows that Britain is well placed in science, technology and industry to emerge from the global crisis.

The research contains two pieces of evidence which will stun critics of the Government’s long-term management of the economy. The UK country report outlines that:

“The United Kingdom has the largest value of foreign direct investment (FDI) relative to GDP among G7 countries. FDI inflows more than doubled in the first quarter of 2009, back to the same level as before the crisis. In the same quarter, FDI flows to the other G7 countries dropped by 63%…

“The United Kingdom registered the highest rate of productivity growth (2.4% a year) among G7 countries over 1998-2008.”

According to the report, the UK is particularly strong at ‘Competing in the world economy’ where it holds the top spot in four out of nine categories and in ‘Connecting to global research’ where it is top in three out of five categories. The UK is ahead of the OECD average in 74 per cent of categories. Meanwhile, the worst performance falls in the ‘Financing innovation’ category where Britain is particularly poor on measures of ‘Business financed R&D.’

The Government has, since 1998, actively sought to close the productivity gap with a series of interventions aimed at the “five drivers of productivity.”

Last week, Alistair Darling announced that £600 million would be cut from the higher education and science budgets.

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