A new £32m Productivity Institute (PI) headquartered at the Alliance Manchester Business School will boost groundbreaking research to explore how to increase productivity, boost wages, and support the economic recovery across the UK. Funding for the Productivity Institute is being delivered through the Economic and Social Research Council (ESRC), part of UK Research and Innovation and through its Strategic Priorities Fund.

The new Productivity Institute is being funded by £26m from ESRC and £6m from Alliance Manchester Business School and its partner institutions for five years, from 1 September.

This is the largest economic and social research investment ever in the UK, as part of the country’s continued economic recovery from the COVID-19 pandemic.

At the same time, ESRC announced the launch of the Programme on Innovation and Diffusion (POID). ESRC will provide £4 million of the funding for the POID, with an additional £1 million provided by the London School of Economics.

PI’s mission is to increase productivity, remove barriers, boost wages, and support the economic recovery. Initially, over 40 researchers from leading UK institutions will work with the government and business leaders on issues that impact productivity, such as diversity, remote labour, and workers’ well-being.

Economist Professor Bart van Ark of the Alliance Manchester Business School will lead the initiative, which includes eight partner institutions (University of Cambridge, the National Institute of Economic and Social Research, University of Glasgow, University of Sheffield, King’s College London, Queen’s University Belfast, Cardiff University, and University of Warwick).

Professor Dame Nancy Rothwell, president and vice chancellor of the University of Manchester, said, ‘[T]his is a landmark investment by the government. It demonstrates how serious the government is about solving the UK’s productivity puzzle and importantly, it signals a commitment to help create an economy that works for everyone, with growth that is sustainable, inclusive and regionally distributed.’

The Productivity Institute will also collaborate with the Economic Statistics Centre of Excellence (ESCoE) and with organisations outside of the UK, including the Organisation for Economic Co-operation and Development (OECD) in Paris. A programme of regional engagement with policymakers and business leaders as well as HM Treasury, BEIS, the CBI, and others is also included.