Editorial

Citation

Heap, J. and Burgess, T.F. (2016), "Editorial", International Journal of Productivity and Performance Management, Vol. 65 No. 7, pp. 874-874. https://doi.org/10.1108/IJPPM-07-2016-0131

Your editors are located in the middle of an unfolding productivity experiment that could, probably will, have major international ramifications. On the 23rd of June the UK public voted to leave the European Union (EU). Numerous reasons have been given – but these do not matter at this point … except insofar as the EU learns what the public do not like about the EU and attempts to reform itself … assuming, of course, that the “public” in other EU countries thinks like the UK public and that there is the will in the EU institutions to change.

What matters for the UK now is what happens to UK productivity, to the UK economy, to UK society in general but, in particular, to the unity of the four countries comprising the UK. What matters most for the rest of the world is what happens to the EU institutions and its economy, and to the global economy.

The answer, of course, is that no-one knows what will happen.

In terms of productivity and performance of UK industry, it may be that leaving the EU – and having the views of the population heard and acted upon – gives a sense of nationalistic pride which motivates an improvement in performance. Such a boost is common – for example, following the Athens Olympics, Greece had a productivity and economic boost.

Generally speaking, lowering trade barriers helps improve performance of an economy – so any move to create barriers between the EU and the UK as part of the “leave” negotiations could harm the UK economy – but would possibly have more negative impact on the EU economy given the direction of trade imbalance.

How any structural changes in the UK economy play out is a major imponderable. In recent years the UK economy has been drifting away from manufacturing and relying increasingly on a services and knowledge-based economy where productivity seems less easy to fathom and control. A UK outside of the EU may no longer be seen by global companies as a good place to invest. Prospects such as the UK losing a good part of its financial services sector to the continent are exercising people’s minds. Conversely might the freedom from EU regulations allow the UK to do something to safeguard its manufacturing base, such as steel-making that has suffered dramatically from what many regard as Chinese dumping?

Surely sense will prevail – and a new trade deal will be negotiated quickly. Any attempt by the EU to “punish” the UK would prove disastrous for both sides.

And remember, the UK has not left Europe … just the EU. Many who voted to leave are proud to be European … but have misgivings about an unaccountable organization whose accounts have not been signed off for many years.

So, this is not goodbye. Relationships may have changed – but the UK is still there, just over the Channel from the continent, ready to trade with Europe and beyond.