As the UK marks National Productivity Week, the national ambition to “unlock productivity potential” is once again in focus. Yet productivity is not evenly distributed and cannot be addressed through national policy alone.
For local and combined authorities, the challenge (and opportunity) lies in understanding how regional dynamics shape productivity outcomes, and how targeted interventions can deliver measurable change.
Productivity is local: understanding the regional picture
Productivity performance varies significantly across the UK. These differences are driven by a combination of structural and behavioural factors, including:
- Sector composition and industrial heritage
- Business management practices and leadership capability
- Adoption of technology and innovation
- Access to skills, infrastructure, and support ecosystems
Crucially, this means that productivity cannot be addressed through a single, standardised approach. It requires place-based strategies informed by robust regional data.
The role of regional data: from benchmarking to intervention
The increasing focus on The Role of Regional Data in Driving Productivity reflects a shift in how local economies are understood and supported.
However, data alone is not enough.
To be effective, regional insight must be used to:
- Identify specific productivity constraints within local economies
- Target sectors and business cohorts with the greatest potential for uplift
- Inform the design of interventions that drive measurable business-level change
Our insight report, Unlocking SME Productivity: A Deep Dive into Management Practices, highlights that productivity improvements are often driven by enhancements in leadership, operational decision-making, and process efficiency – areas that can be addressed through structured business support.
This reinforces the need for integrated approaches that connect data, policy, and delivery.
Sector strategy: a key lever for regional productivity
One of the most significant, and sometimes underutilised, levers available to policymakers is sector strategy.
Regional productivity is heavily influenced by the sectors that dominate local economies. High-productivity sectors such as advanced manufacturing, life sciences, and aerospace tend to generate greater output per worker than sectors such as hospitality or tourism.
This has two important implications for policy:
- Regional productivity comparisons must be contextualised
Lower productivity does not necessarily reflect underperformance, but rather sectoral composition - Targeted sector support can drive measurable gains
Supporting the growth and competitiveness of high-productivity sectors offers a clear pathway to improving regional performance
For many regions, manufacturing represents a critical opportunity – particularly where there is an existing base of SMEs with the potential to scale, innovate, and adopt new technologies.
From policy to practice: enabling business-level change
While policy is essential, productivity gains are ultimately realised at the business level.
Programmes that combine data-driven targeting of companies, specialist advice and support for technology adoption and process improvement are consistently shown to deliver the strongest outcomes.
This can be evidenced through GROWTHmapper, Oxford Innovation Advice’s dynamic business diagnostic tool, that provides valuable insights into the SME’s perceived strengths and weaknesses, highlighting areas requiring improvement.
A series of graphical outputs are generated to provide a visual representation of the alignment of the SMT’s perspectives on where the business is strong, and where improvements are needed.
These form the focal point for a facilitated discussion, led by an accredited coach or adviser, which illuminates the agreed business support needs of the SME and builds the foundation for a strategic pathway to their identified objectives and targeted productivity.
The outputs reflect more than engagement, they demonstrate tangible shifts in business behaviour, which underpin productivity improvements over time and provides valuable datasets at programme level about regional strengths and weaknesses across business sectors.
A coordinated approach to unlocking productivity
As national and regional stakeholders continue to explore how productivity can be unlocked, there is a clear need for greater alignment between insight, strategy, and delivery.
This includes:
- Using regional data to inform investment decisions
- Embedding sector-focused approaches within local growth strategies
- Ensuring businesses can access practical, high-quality advisory support
- Measuring success through long-term productivity outcomes, not just short-term outputs
Conclusion: delivering productivity through place-based action
Unlocking the UK’s productivity potential will not be achieved through national policy alone.
It will depend on the ability of regional stakeholders to understand the specific dynamics of their local economies, prioritise sectors with the greatest potential for impact and deliver interventions that enable meaningful change within businesses.
The opportunity for local authorities and delivery partners is clear: to move beyond analysis and towards targeted, evidence-led action that drives sustainable productivity growth.
If you are looking for an effective delivery partner, get in touch today.
Contact David Ledbury, Stakeholder and Partnership Director at David.Ledbury@oxin.co.uk
