The use of business services by UK industries and the impact on economic performance
This study analyses the use of certain business-to-business and business-to-government services in the UK, by industrial sector of the client. The activities covered, known as 'business services' for the purposes of the report, include telecommunications and IT-related services, facilities management, business process outsourcing, and construction and engineering-related services.
There are two key conclusions. First, the study finds evidence of a positive correlation between the importance of these services to business users across the UK's various industrial sectors, and productivity growth across those sectors. The five sectors for which the use of business services was most important, in both 1995 and 2013, all feature amongst the six sectors (out of 12) that achieved above-average productivity growth between those two years.
Secondly, above-average productivity growth amongst intensive users of these services is associated with strong growth in sector GDP, rather than being associated with net job losses. Indeed for four of the five most intensive users of business services, GDP growth was fast enough over the 1995-2013 period to allow above-average productivity growth to be accompanied by above-average employment growth. And the number of jobs was unchanged in the fifth of these sectors, despite the strong productivity performance seen there too.
Oxford Economics Research Team
Our Economics Impact team produces original, evidence-based research made accessible to decision-makers and opinion leaders. Principals for this project included: