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What fax machines and floppy disks reveal about Britain’s productivity problem

What fax machines and floppy disks reveal about Britain’s productivity problem

Stay on the scene, like a fax machine

PERHAPS the greatest problem facing the British economy—bigger, even, than Brexit—is weak productivity growth. During the 20th century the output per hour of British workers steadily increased. In the past decade, however, it has barely budged (see chart). That in turn has kept wage growth in check. The government says it will offer bold solutions to Britain’s productivity problem in its long-awaited “industrial strategy”, on which it is expected to publish a paper shortly. Yet take a look at the technology that British firms use, and it becomes clear that politicians have a huge task on their hands.

The technology at a firm’s disposal influences how productive it is. Some British companies use the whizziest stuff available. Funding Circle, a peer-to-peer lender based in London, uses machine-learning programs alongside more conventional methods to assess the creditworthiness of potential borrowers. In such firms,…Continue reading

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