A Second Look At Productivity, Machinery and Skills in Britain and Germany

The overall aim of the National Institute's research programme in this field is to examine the relative contribution of physical and human capital to productivity with the help of site visits to samples of matched plants in Britain and Germany. A first study, carried out in 1983-4, was based on metalworking plants in Britain and Germany; it pointed to the overriding importance of skills at supervisory and shop floor levels in contributing to the better choice and utilisation of machinery and to a substantial German productivity advantage. The present study was carried out three years later, in 1986-7, and compares part of the wood furniture industry: the production of fitted kitchens. This branch is more standardised in its products—and hence easier to compare—than the more traditional branches of the furniture industry. It now accounts for over a quarter of the value of all furniture sales in both countries.