March 14, 2026 — Cardiff, Wales — Professor Philip McCann, Sir Terry Leahy Chair of Urban and Regional Economics at Alliance Manchester Business School, published a guest column titled Productivity, Place and Wales’ Economic Reality on Friday, arguing that Wales ranks near the bottom of UK productivity measures and urging a better understanding of productivity’s link to wellbeing.
The article, from The Productivity Institute’s Wales Productivity Forum, details Wales’ position alongside regions like the North East of England and Northern Ireland in the lowest productivity group. McCann notes the UK’s core-periphery economic structure, centered on London, has persisted for 15-20 years, with Wales in the periphery facing higher costs of capital—200-300 basis points more than the South East, akin to gaps between the UK and countries like Romania.
Rethinking Productivity Misconceptions
McCann challenges common views of productivity as a “bleak and outdated” concept of squeezing output from workers:
When people hear the word productivity, many immediately picture something bleak and outdated. The image that often comes to mind is a Dickensian factory floor, where workers are treated as little more than machines, pushed to produce ever more output under relentless cost pressures. It is an image rooted in squeezing more widgets out of people, with little regard for their skills, creativity or wellbeing. That picture, however, bears little resemblance to what productivity actually means in a modern economy.
He defines productivity as transforming inputs into higher-value outputs smarter ways, with no trade-off against wellbeing. Higher productivity correlates internationally with better life expectancy, public services, and engaging work.
Productivity is not about driving costs down at any human price. It is about doing things better, in smarter and more imaginative ways.
Broader Research Context
Supporting research from The Productivity Institute shows Wales at 84.9% of UK output per hour, with 14.1% growth since 2009 versus the UK’s 10.5%. Dr. Thomas Nicholls, Welsh Government Chief Economist, stated:
Boosting productivity is essential for sustainably improving living standards in Wales. Increasing productivity is also crucial for strengthening public finances so that governments can provide better public services.
An earlier insights paper, Wales’ Productivity Challenge: A Focus on the Future, analyzes gaps and strategies. Related Business News Wales pieces, like Productivity is Misunderstood – and That Matters for Wales, echo these themes.
Recommendations for Wales
McCann calls for independent productivity bodies, like those in Australia and the Netherlands, to embed productivity in policy, reduce investor risk, and narrow finance gaps. He expands on this in the podcast Understanding Productivity in Wales.
The Productivity, Place and Wales’ Economic Reality piece builds on forum discussions, emphasizing productivity as key to economic financing, work quality, and societal provision amid Wales’ challenges.