Productivity Puzzles

Is all foreign direct investment good for productivity? Can the UK still compete for the world's most valuable investment projects? And what makes FDI transformative rather than merely incremental? 

This episode explores the shift from the quantity of inward investment to its quality, what researchers now call transformative FDI, and uses the West Midlands as a case study in how investment promotion, local capabilities, and long-term economic strategy can work together to drive productivity growth.

Host Professor Bart van Ark is joined by:

Professor Jun Du, Managing Director, The Productivity Institute; Professor of Economics, Alliance Manchester Business School.

Nigel Driffield, Professor of International Business, Warwick Business School; Deputy Pro-Vice-Chancellor for Regional Engagement, University of Warwick.

Neil Remi, Chief Executive, West Midlands Growth Company.

For more information on the topics discussed:

Transformative FDI & Regional Productivity Research: Publications and studies by Professor Nigel Driffield and Professor Jun Du at The Productivity Institute.

Certainty without conviction: Why the EU-UK Trade and Cooperation Agreement failed to reverse Brexit’s investment exodus by Jun Du, Nigel Driffield, Oleksandr Shepotylo & Xiaocan Yuan. https://www.aston.ac.uk/certainty-without-conviction

Sub-National Economic Strategy: Lord Heseltine’s report, No Stone Unturned: In Pursuit of Growth (2012).

Global Investment Trends: UNCTAD World Investment Report & Statistics.

UK Industrial Support Programs: Information on national manufacturing initiatives including Made Smarter and the Drive35 programme. 

The Manchester Model: what foreign inward investment reveals about the UK’s most productive city outside London by Jun Du, Xiaocan Yuan, Diane Coyle

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.

Is the UK’s recent productivity recovery a sign of lasting improvement? How could AI, technology adoption and shifting global economic conditions shape the country’s future productivity?

This episode of Productivity Puzzles explores the challenges facing the UK economy, from weak technology diffusion and widening gaps between firms to trade, competitiveness and the priorities needed to support long-term productivity growth.

Host Professor Bart van Ark is joined by:

Professor Jun Du, TPI Managing Director and Professor of Economics at Alliance Manchester Business School

For more information on the topic:

Bart's farewell blog: https://www.productivity.ac.uk/news/productivity-place-and-the-power-of-alignment-reflections-on-six-years-at-tpi/
Jun's introductory blog: Productivity when nothing stands still - The Productivity Institute
Jun Du, Look inside, look around, look beyond: Look inside, look around, look beyond: From productivity gaps to adaptive capacity - The Productivity Institute
Jun Du, The options are familiar. The world around them is not: The options are familiar. The world around them is not. - The Productivity Institute
Bart & Dirk's pro-productivity policy book/project:  Pro-Productivity Policies - The Productivity Institute
Bart's recent frontier/diffusion paper: Rewiring Europe’s Productivity Framework: Aligning Investment, Innovation, and Diffusion - The Productivity Institute
The Manchesterism publication: The Manchester Model: what foreign inward investment reveals about the UK’s most productive city outside London - The Productivity Institute
Link to the ONS paper: Measuring labour productivity: our new approach | National Statistical

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.

Generative AI has moved from curiosity to everyday tool with remarkable speed. But the big productivity question is not simply whether people are using it; it is whether firms, sectors and economies can turn that use into lasting productivity gains.

This episode of Productivity Puzzles explores the challenges and opportunities that Generative AI presents, centring on a new article just published in the International Productivity Monitor, the joint journal of the Centre for the Study of Living Standards and The Productivity Institute.

Host Professor Bart van Ark is joined by:

Martin Baily, Senior Fellow Emeritus at the Brookings Institution
Diane Coyle, Bennett Professor of Public Policy and Research Director, Bennett School of Public Policy, University of Cambridge

For more information on the topic:

Martin Neil Baily, David M. Byrne, Aidan T. Kane and Paul E. Soto, The Potential for Sustained Productivity Impetus from GenAI, International Productivity Monitor, Issue 50, pp 5-26.
Martin Neil Baily, 2023. "Lessons from a Career in Productivity Research: Some Answers, A Glimpse of the Future, and Much Left to Learn," International Productivity Monitor, Issue 44, pages 120-149, Fall.
Productivity Puzzles Podcast: Ask the expert on… what is productivity?
Tera Allas, AI and productivity: the ladder of leakage, Substack.
Carol Corrado, Jonathan Haskel, Cecilia Jona-Lasinio, Artificial intelligence and productivity: an intangible assets approach, Oxford Review of Economic Policy, Volume 37, Issue 3, Autumn 2021, Pages 435–458
Zvi Griliches, Hybrid Corn: An Exploration in the Economics of Technological Change. Econometrica, October 1957, 25(4), pp. 501-22.

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.

Why do firms invest when they do and not necessarily when they should? Are firms too cautious to invest? Or just realistic about uncertainty? Is the real investment gap about money or about mindset?

This episode of Productivity Puzzles explores why the UK has invested less than its peers, drawing on two brand-new studies from The Productivity Institute: one looking at how firms invest, the other at how managers think.

Host Professor Bart van Ark is joined by:

Tera Allas, Honorary Professor at Alliance Manchester Business School, Chair Advisory Board, at The Productivity Institute.
Stephen Roper, Professor of Enterprise at Warwick Business School, founding Director of the Enterprise Research Centre, Co-Director of the Innovation Research Caucus, and Research Programme Lead on “Firms in Transitions” at The Productivity Institute.
Catherine Mann, Honorary Professor at Alliance Manchester Business School, External Member of the Monetary Policy Committee at the Bank of England, Programme Lead on “Finance and Investment” at The Productivity Institute.

For more information on the topic:

E. Golubova, S. Roper (2026) Understanding productive investment decisions: Investment patterns and decision-making processes, The Productivity Institute and Enterprise Research Centre.

T. Allas, S. Roper (2026) Ambitious but risk averse: UK manager attitudes and the investment gap, The Productivity Institute.

C. Mann (2026) Finance, Investment, and Productivity: Distillation and Synthesis of TPI Research Programme on Finance. Productivity Insights Paper No. 085, The Productivity Institute.

T. Allas, D. Zenghelis (2025) The UK’s capital gap: a short-fall in the trillions of pounds that will take decades to bridge. Productivity Insights Paper No. 055, The Productivity Institute.

C. Mann (2024) UK Business Investment: Economists, Managers, Financiers. An Integrated Framework to Analyse the Past and Underpin Prospects. Productivity Insights Paper No. 036, The Productivity Institute.

Productivity Puzzles podcast, Business Dynamism: is turbulence good for productivity?, The Productivity Institute.

Y. Xue, C. Mann (2026) Cost of Capital and Investment: Evidence from the UK. Working Paper No. 072, The Productivity Institute

S. Roper, R. Owen (2026) The early-stage, equity-finance journey of potential high-growth companies in the UK, Department for Business and Trade.

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.

If one in five working‑age people are inactive, what does that say about the UK’s productivity problem? Why does ill health push so many people out of work in the UK, but not in peer countries?

Rising economic inactivity linked to health has become a major challenge for the UK economy. In this discussion, Charlie Mayfield draws on insights from the Keep Britain Working review to explore the role employers can play in supporting people to remain in work. The conversation examines how workplace practices, health support and collaboration between employers, government and communities can help strengthen workforce participation and productivity.

Host Professor Bart van Ark is joined by:

Charlie Mayfield, Chair, Keep Britain Working Review, and Former Chair, John Lewis Partnership

For more information on the topic:

Keep Britain Working: final report, independent report for the UK Government. 
George Williams, How to keep Britain working: Making the Vanguard Phase a success, Lancaster University, (05/03/2026).
Sam Atwell, How to Keep Britain Working, Health Foundation (28/10/2025).
CIPD, Keep Britain Working review makes employee wellbeing impossible for business to ignore, says CIPD (11/11/2025).
Productivity Puzzles podcast, Business model innovation and strategic productivity.
The Productivity Institute, Working ‘on’ the business not just in it (21/06/2021).

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.