Preserve The Uk's Capital Market example essay topic
402 words
1. Current state of competitiveness compared to other leading economies " '94- '96: UK output capita = 100 by comparison to West Germany (126) and US (164) " UK has lowest output per worker, per hour, and lowest capital and labour productivity in comparison to France Germany and the US " Corresponds to 20-30% behind France / Germany and 40% behind US, despite British workers doing 9 hrs more than their German and 5% more than their French counterparts " Only 90% of British products pass quality control first time compared with Germany's 97% (due primarily to poorly skilled workforce. In turn, parts are "recycled" and it may take up to 10 times as long before they leave the factory, lowering productivity) " Any comparatively stronger performance is due more to increasing the labour input than using the existing workforce more effectively " UK's chemical companies are the most productive of all the industrialised nations " UK's paper products are 2nd to only the US " 20% of UK companies have unacceptable performance standards. 1.
Analysis of reasons why " Poor management " Lack of investment (in technology, equipment, infrastructure) " Poorly skilled workers leading to poor levels of productivity " Restrictive planning laws / excessive market regulations that suppress competition and enterprise " Lack of a competitive exchange rate " Poorly paid workers - workers believe their wages are too low " Poor organisation, improper layout, poor machinery " As UK firms are smaller on average they miss out on economies of scale " Bad work practice e.g. too many workers in some areas " Lack of a united workforce - workers do not feel valued " Managerial weakness 3. Evaluation of possible solutions " Whole sale deregulation " Preserve the UK's flexible labour market " Preserve the UK's capital market " Maintain sustained macroeconomic stability " Develop a more powerful competition policy " Encourage inward investment and other global good business practice " Invest in schemes to improve workers skills " Break down barriers to entrepreneurship and innovation " Tax incentives for investment in R&D, capital machinery " Think on an international level as opposed to a national level to try and compete internationally " Increase the size of firms to benefit from economies of scale " Stop competing on basis of low labour costs to reduce average cost " Increase wages to motivate workforce.
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