Trends In UK Business Dynamism And Productivity 2023

13th December 2023

In 2021, 70.6% of workers in the UK worked in firms with labour productivity below the mean.

The dispersion of firm-level productivity across firms has increased; in 2021, workers in firms at the 90th percentile produced around 3.7 times as much output compared with workers in firms at the median of the distribution.

Business dynamism has slowed compared with the period before the 2008 economic downturn; the total reallocation rate has fallen from 30.7% in 2001 to 20.6% in 2022.

The responsiveness of firm-level employment growth to productivity has fallen since the 2008 downturn, leading to overall lower productivity growth as relatively more productive businesses expand more slowly.

Measures of market power have increased; the average markup on intermediate consumption increased from 111% in 1997 to 127% in 2021.

Read the full report HERE