What has worked to raise productivity, and what has not?

How to read these

Six cases

• Randomised trial · India (large textile firms near Mumbai)

  Free management advice in Indian textile plants

  Field experiment; results published 2011 (working paper) and 2013 (journal)

  +11%

  productivity in advised plants

  What was done

  Researchers gave free, intensive consulting on modern management practices to a randomly chosen set of plants and compared them with plants that did not receive it.

  What was found

  Adopting the practices raised average productivity by 11%, through better quality, more efficient work and less stock. Owners also handed more decisions to managers and used computers more.

  What it cannot show

  Large firms in one industry in one country, with intensive consulting. It shows that better management can lift productivity, not that a light-touch UK scheme will.

  Lesson for the UK

  The gain came from many firms not knowing the practices existed. That points to spreading known methods, with a comparison group to prove it works.

  Source: Bloom, Eifert, Mahajan, McKenzie and Roberts, Does Management Matter? Evidence from India (NBER Working Paper 16658)

  Relates to: Existing-firm management and technology adoption

• Official evaluation · United Kingdom (Help to Grow: Management) and England (Made Smarter Adoption)

  What the UK’s own business-support schemes found

  Evaluations published June and July 2026

  Not yet

  a measured productivity effect

  What was done

  Help to Grow: Management gave small-firm leaders a management course. Made Smarter Adoption gave manufacturers advice and support to adopt digital technology. Both were evaluated against similar firms that did not take part.

  What was found

  Help to Grow: Management raised business survival rates, but found no statistically significant evidence of business growth or improved productivity. Its data end in March 2023, and the report says such effects typically take at least five years to appear. Made Smarter Adoption (April 2022 to March 2025): firms reported benefits, and analyses repeating earlier research pointed to higher turnover and employment, but the more robust analysis found no statistically significant effect on turnover, employment or productivity.

  What it cannot show

  Short follow-up. A result that is not statistically significant does not prove there was no effect: the Help to Grow report says the effect could be too small to detect, the economic context difficult or the data late. Both schemes are lighter touch than the Indian trial.

  Lesson for the UK

  Do not scale support before it has been tested against a comparison group, with productivity as the outcome.

  Sources: Department for Business and Trade, Help to Grow: Management phase 1 final evaluation report (11 June 2026); Department for Business and Trade, Made Smarter Adoption: impact and process evaluation (30 July 2026)

  Relates to: Existing-firm management and technology adoption

• Official estimate · United Kingdom

  Full expensing: a tax change aimed at business investment

  Made permanent in November 2023; official estimate in the November 2023 forecast

  +0.1%

  estimated potential output

  What was done

  Companies can deduct the whole cost of qualifying machinery and equipment from taxable profits in the year they buy it. Making it permanent, rather than temporary, aimed to raise investment for good rather than bring it forward.

  What was found

  The Office for Budget Responsibility estimated that the permanent policy would add £13.9 billion of business investment over its forecast, raise the capital stock by 0.2% in 2028–29 and raise potential output by 0.1%.

  What it cannot show

  A forecast, not an observed result. It estimates a small effect on output even from a large tax change, and says nothing about whether investment has risen as predicted.

  Lesson for the UK

  Tax incentives can move investment, but the official estimate of the productivity gain is modest. Check outturn against it.

  Source: Office for Budget Responsibility, Economic and fiscal outlook, November 2023, Box 2.1

  Relates to: Turn investment promises into a deliverable pipeline

• Research study · Auckland, New Zealand

  Allowing more homes to be built in Auckland

  Reform in 2016; study published 2022

  More homes

  built where rules changed

  What was done

  In 2016 Auckland changed its planning rules to allow denser housing on about three quarters of its inner suburban land. Researchers compared building in the changed areas with building in areas that were not changed.

  What was found

  They found strong evidence that the change increased construction, and the result held even when allowing for building that merely moved from unchanged areas to changed ones.

  What it cannot show

  It measures construction in the short run, not productivity, rents or pay. The size of the effect is disputed. The link to productivity runs through letting more people live where jobs are, which this study does not test.

  Lesson for the UK

  Planning rules can change how much gets built. The test for the UK is homes completed where jobs are, not permissions granted.

  Source: Greenaway-McGrevy and Phillips, The Impact of Upzoning on Housing Construction in Auckland (Cowles Foundation Discussion Paper 2330, May 2022)

  Relates to: Turn housing permissions into completed homes

• Reported result · Great Britain

  Clearing the queue to connect to Britain’s grid

  Reform implemented 2025; pipeline published 8 December 2025

  283 GW

  prioritised pipeline

  What was done

  Projects had waited in a first-come queue of more than 700 GW for a connection. The regulator approved a reform so that projects that are first ready are first served, and the system operator re-ordered the queue to favour projects that were most developed and aligned to national targets.

  What was found

  The operator’s new prioritised pipeline unlocks 283 GW of generation and storage, plus 99 GW of transmission-connected demand. It said more than 300 GW of projects in the old queue will not move forward at this time.

  What it cannot show

  This is an administrative result, not a measured outcome. It shows the queue was cut and re-ordered, not yet how many projects connected, how fast, or at what effect on power prices or investment.

  Lesson for the UK

  Sorting a queue is the first step. The test is projects connected and in use, which the plan should publish.

  Source: NESO, NESO implements electricity grid connection reforms to unlock investment in Great Britain (8 December 2025)

  Relates to: Connect the power Britain needs

• Research study · United States (Department of Energy, Small Business Innovation Research)

  Small early-stage grants to young technology firms in the United States

  Awards 1983–2013; study published 2017

  ×2

  chance of later venture capital

  What was done

  Small firms competed for a first-stage proof-of-concept grant, followed by a larger second-stage award for successful firms. The study compared firms just above and just below the funding cut-off.

  What was found

  A first-stage grant roughly doubled the chance of later venture-capital funding and had large positive effects on patents and revenue. The larger second-stage award showed no consistent extra effect on venture capital.

  What it cannot show

  Two energy-technology offices of one agency, and firms near the cut-off. The UK has a smaller venture market and a different way of funding early-stage research.

  Lesson for the UK

  Small, competitively awarded early grants can unlock later private finance. Larger awards need their own test.

  Source: Howell, Financing Innovation: Evidence from R&D Grants (American Economic Review 107(4), 2017)

  Relates to: Turn research into products and adoption

What the cases have in common