UK manufacturers should look to greater IT investment to
boost their productivity, according to the Confederation of British
Industry.
Although leading UK manufacturers were world-class in the way
they apply IT to improve performance, there was a long "tail" of UK
producers that needed to look at their level of IT investment, said
Nick Brayshaw, chairman of the CBI Manufacturing Council.
"There is already a lot of data showing that Britain is behind
the US in its application of IT to boost productivity," he said.
"When you look at the point of greatest divergence in productivity,
it comes in total factor productivity, which includes technology
investment."
He said much of the lack of IT investment was down to poor
capital spending in the bulk of UK manufacturing. "If you look at
the level of UK industrial investment, it has been woefully low.
The US has much more focus on investment and productivity and gets
the benefits from it."
Brayshaw called for tax breaks for capital investment in
technology. The Treasury first introduced tax incentives for
research and development spending in small businesses, then
expanded the scheme to all businesses. "We would like to see a
similar 'tax credit' scheme for capital allowances," he said.
Investment
IT investment in the UK is growing faster than in any other
Western European country, with 4.2% growth expected in 2006, up
from 3.5% in 2005, according to the 2006 report from the European
Information Technology Observatory, which was published last
week.
The report said the UK's IT growth is ahead of the US (3.9%) and
Japan (1.1%), but behind the rest of the world, which includes
China and India (6.8%). Britain has the third-highest per capita
spend on IT, behind Sweden and Denmark.