Regional differences in productivity performance across the UK are seen by government as important policy targets. For a number of years, government objectives have been set not only in terms of improving UK productivity performance against other countries but also in creating conditions to allow less productive regions to reduce the “gap” between themselves and the most productive.
This chapter discusses the issues surrounding the measurement of productivity at a regional level. It introduces the uses and importance of regional statistics before describing regional productivity in terms of the historical and current measures available. Clarification is provided about what the different measures show – whether they describe economic performance, welfare or productivity – and the effect that using different measures can have.
Some of the factors that explain differences in the productivity of regions are identified, with discussion of the issues surrounding data capability and availability at the regional level. The chapter finishes with discussion of future development plans, with particular reference to the recommendations made to better satisfy the pressing needs for improved regional data that were highlighted in the Review of Statistics for Economic Policy-making (Allsopp, 2004).