IPPR UK Investment Trails G7 Peers Since Mid-1990s

18 Jun, 2024

IPPR UK Investment Trails G7 Peers Since Mid-1990s

Investment in the UK has consistently fallen behind other G7 nations since the mid-1990s, as highlighted by a recent report from the Institute for Public Policy Research (IPPR). According to OECD data, the UK has ranked at the bottom for investment among G7 countries for 24 out of the last 30 years. This underperformance is primarily attributed to insufficient spending by UK companies on technology and innovation over the past three decades, with public sector investment also falling below the G7 average.

In 2022, the UK recorded the lowest private company investment among G7 nations for the third consecutive year. Furthermore, the UK ranked 28th out of 31 OECD countries in terms of business investment, with countries like Slovenia, Latvia, and Hungary surpassing the UK in investment relative to their economies.

Private investment encompasses expenditures in factories, equipment, and technology. The G7 includes the UK, US, France, Germany, Italy, Japan, and Canada, while the OECD consists of 38 member countries.

The IPPR report underscores the detrimental impact of inadequate investment on UK productivity and economic growth. It criticizes proposed cuts to investment by both major political parties post-election, cautioning against potential long-term economic consequences.

The IPPR urges the incoming UK government to prioritize high-quality public investments to attract private sector funds, especially in critical sectors such as electric vehicles and renewable energy. They stress the importance of public investments in education, infrastructure, and healthcare to create a conducive environment for sustainable economic growth.