Data Insights - can technology solve the UK's productivity puzzle?

In recent years, the UK economy has experienced historically low unemployment. The resulting labour shortages have led organisations to seek a higher rate of output through improved workforce productivity. But with the UK in the grip of a prolonged period of depressed productivity growth (known as the Productivity Puzzle), it is far from clear how such improvements can be achieved.

Yet, despite the UK's poor track record on productivity growth, the UK software and IT services (SITS) market experienced its highest annual rate of growth in 2022, up 12.2% year-on-year, valuing it at almost £68bn.

But we are seeing that buyers want a much more rapid and more significant return on the billions they have ploughed into IT spend. Why have these vast sums not translated into greater productivity for the UK? This report considers these questions and what they mean for SITS suppliers.

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