Management and leadership skills are essential for successful levelling up

There are large differences in productivity between the UK’s regions, with the gap between the most and least productive much higher than in other European countries. In response to this, the Government has signalled its intention to boost the UK’s productivity as a central part of its levelling up agenda. 

We firmly believe that if the Government is serious about levelling up all parts of the UK it must prioritise investment in management and leadership skills. 

And here is why: sound management and leadership capability make businesses more resilient and productive.

We’ve seen that better managed firms fared better throughout the pandemic, and the way to economic recovery is through boosting businesses’ management capacity. 

Improving leadership and management practices have been strongly correlated with increased productivity, even when only small improvements are made. But British businesses, especially smaller ones, continue to underinvest in their management training. In England, Scotland and Northern Ireland, around  13% of SMEs offered training to develop management skills in 2019. In Wales, this figure is even lower – at 8% – and across all nations, these figures remained unchanged since 2017.

Most of the time, SMEs are unaware they have a training need or of the available training opportunities out there. That’s the reason CMI champions the Help to Grow Management scheme; it will play an important role in building management and leadership capability for SMEs and help them to innovate and grow. The main challenge now is to ensure businesses take up this opportunity. This will be essential to building productive capacity in the private sector, especially outside of London and the South East. 

Infrastructure development is an important pillar of the Government’s focus for higher productivity and levelling up. Managers and leaders will be needed to oversee the design, application, and effective operation of big infrastructure commitments. For example, we estimate that the two million green jobs the Government plans to create by 2030 could require a minimum of 130,000 new managers. 

As a lot of this investment will be outside of London and the South East, this will have a big impact on levelling up. For instance, Teesside will benefit from considerable public and private infrastructure investment, but this needs to be matched with similar investment in management and leadership capability to absorb the investments efficiently. The Whitetail Clean Energy power plant in Teesside will create over 2,000 jobs in construction and operations, and we estimate this could require over 200 new manager roles.

Management and leadership skills are not a ‘nice to have’. They are vital to the UK’s economic recovery post-pandemic and for the Government’s leveling up aims to deliver major infrastructure projects, reduce regional inequality and the productivity gap.

Laurentiu Ciocan– Policy team at CMI