How to boost productivity

January 2016

The UK faces a productivity challenge and needs a more innovative and globally-skilled workforce and a re-balanced economy more capable of export-led growth. A new British Council report suggests that international experience helps develop the global outlook and skills that increase innovation in the workplace and support greater productivity and competitiveness.

Rebalancing the UK Economy

The UK’s need to re-balance its economy, reverse its historic trade deficit, and tackle its long-term productivity challenges is widely agreed. The British Chambers of Commerce recently emphasised the critical need for UK businesses to increase the skills range of their workforce in order to compete internationally, concluding that cultural or language differences (26%) were amongst the greatest barriers to firms wanting to export services. The cost of shortcomings in foreign language skills to the UK economy has been estimated at £48 billion in lost exports. Research by Think Global and the British Council in 2011 found that 74% of business leaders surveyed worried that young people’s horizons aren’t broad enough for the globalised economy. And a UK Commission for Employment and Skills (UKCES) survey found that almost 40% of UK companies felt that managers needed to update problem-solving skills to help drive innovation. Innovation is of course vital for productivity and hence for competitiveness and growth.

If the UK is to compete internationally, a productive and globally competitive workforce is vital. And that workforce will need a global outlook, cultural awareness, language proficiency, problem-solving skills and innovation to be able to compete effectively.

A new report by the British Council, based on a detailed study by CFE Research and LSE Enterprise, suggests international experience is a powerful way of developing these skills.

Experiencing the world and developing yourself

The research found that international experiences – including travel, exchanges, volunteering, studying and working abroad – build skills and characteristics that are associated with short and long-term benefits for individuals and, in turn, business and wider society.

Of those surveyed as part of the study, the majority who had worked, studied or extensively travelled abroad felt they worked well (81%) and could communicate confidently (71%) with people from different countries and cultures. They were more than twice as likely as those without international experience to be proficient in a foreign language.

Importantly, they were also more likely to describe themselves as having the vital transferrable skills linked to innovation, such as analytical and critical thinking (73%) and problem-solving (83%), which they believed their time abroad had helped them to develop.

Perhaps most strikingly, the report shows people with international experience have much greater involvement in innovation in the workplace – a key to the UK’s future productivity

Perhaps most strikingly, the report shows people with international experience have much greater involvement in innovation in the workplace – a key to the UK’s future productivity. 46% had been involved in research and development or product improvement activities, compared to just 28% of those without international experience.

Moreover, the duration of international exposure and degree of immersion appear to be important. These benefits increase the longer the time spent abroad. Some 85% of those with deep experience - defined as at least three months work or study abroad or over six months travelling - described themselves as confident in their ability to adapt to new and unfamiliar situations. This compared to 77% of those who had spent between one and three months overseas.

 

 

Implications for policy

The report also found that once individuals had one international experience, they frequently go on to pursue further study-, travel- or work-related opportunities abroad. Those whose initial experience was at school age agreed most strongly that it had inspired them to look for other international opportunities. This suggests that such early exposure is the gateway to future international experiences.

Despite these benefits, only 30 per cent of state schools in the UK offer student exchanges abroad. And the number of UK university students who study abroad for their whole degree was only around 28,000 in 2012, with little variation over the past decade – a stark contrast to the hundreds of thousands of international students who study each year in the UK.

Furthermore, there appears to be significant variation in the participation of different demographic groups, with those from the most affluent backgrounds participating most. Broadening participation in international opportunities might therefore assist with social mobility as well as benefiting the economy.

There is further work to be done in collecting and communicating evidence on the benefits of international experiences. As the message spreads, employers are more likely to value such experience and those who have it. This in turn would no doubt encourage more people to strengthen their CV’s with such experiences. The report suggests it is also important that employers invest in programmes that give individuals the opportunity to gain work experience overseas throughout their careers. This could have benefits for the wider organisation, supporting the development of an engaged and productive workforce.

Given the benefits which flow from international experience, much more should be done to encourage it from a young age.

Meanwhile, the report argues that providers of international opportunities should communicate more clearly the benefits that participants can expect to gain from their programmes, helping individuals to choose those programs most closely aligned with their development needs. Given the benefits which flow from international experience, much more should be done to encourage it from a young age.

If the UK is to increase its productivity and international competitiveness, the report argues that it would benefit greatly from a workforce with the language, intercultural and problem-solving skills to drive innovation, bridge cultural divides and advance growth and prosperity. The evidence suggests that more international experience could play an important part in this transformation.
 

Alice Campbell-Cree and Sarah Walkley, Policy and External Relations, British Council