How has Germany cracked the productivity puzzle?

by Jones David

Productivity is a word that means many different things to many different people. It’s also a term loaded with negativity, as it conjures up images of sleepless nights, hundred-hour working weeks and familial unrest. However, Germany is one country that has proven something important in recent years; that the productivity puzzle can be cracked and that it’s possible for a country’s workforce to be productive without working itself to the bone.

The UK, in particular, is lagging behind the eurozone. Whilst productivity rates rose by 1% of 2020 overall, they improved only 0.2% in Britain, rising from 0.6 to 0.8. Indeed, UK workers are 27% less productive than their German counterparts, which means that an average German worker could technically work a 4-day week and still be more productive.

The UK is estimated to be missing out on around £130 billion in output every year simply because it’s not productive enough. With Brexit looming and threatening to leave the country in an economical landfill, it’s absolutely vital that it learns from the example set by its close cousin. 

So, just why is Germany so productive?

Skills – In a study comparing the number of teenagers with low basic skills in numeracy and literacy, the UK came second only to the US. Without the fundamental skills that underpin almost every enterprise, it’s no wonder that the UK is less productive. Germany, meanwhile, shows greater basic skills rates than both France and Canada. The same study found that the UK’s older and younger generations both had very similar skill levels, which reveals there has been very little progress on that front in the last 40 years.

Equipment – It surely goes without saying that a man is only as useful as the tools he uses and Germany is a leading authority when it comes to manufacturing. Via specialist websites such as RS Components, it’s even possible for smaller enterprises to have access to some for the Best equipment that’s leagues ahead of what is offered in the UK.

Culture – There is a cultural drive in Germany to continuously improve and to keep innovating, whereas the British culture is more firmly rooted in tradition. Improving productivity isn’t about making small surface changes, it’s about making fundamental cultural changes and it’s unclear whether the UK is ready to make such drastic moves.

Training – Whilst there are more university graduates working in the UK, there is greater respect for vocational ‘on-the-job’ training in Germany, which is arguably more important in many sectors, particularly manufacturing. UK workers might have more tertiary skills than their German counterparts, but when it comes to actual tangible skills, Germany is leaving them in the dust.

The key, it appears, is in education and in giving our workers the right frameworks and the right tools to succeed. Of course, there is no one answer and one solution to the productivity puzzle but Germany appears to have at least figured out a pretty solid one – productivity isn’t just about processes; it’s about people!

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