Productivity and the pandemic

This is a collection of essays that does what it says in the title, Productivity and the Pandemic. The book has a UK focus and, as an output of the Productivity Insights Network, a strong interest in the geographic impact of the pandemic shock to the economy. The chapters range from the future of cities to mental health, from housing markets to entrepreneurship. As always with an edited volume the contributions vary, and few people will want to read cover to cover rather than picking out the chapters of interest to them. Another issue of course is that the pandemic isn’t over so it is quite early to be trying to evaluate its impact.

Nevertheless, there are some interesting chapters. I enjoyed the chapters on global supply chains and on firm strategies under uncertainty, although neither of them offer definitive answers about pandemic impacts. But clearly the questions of resilience and uncertainty will figure in policy debates from now on. Such tightly coupled production and distribution networks might not be the thing in future. (I write as food distribution seems to be in question again in the UK because of ‘pinged’ workers needing to isolate, and a threatened haulage strike, and Brexit.)

I also particularly liked a later chapter on ‘The Paradox of Efficiency’ by Ekkehard Ernst, about hedging risk in uncertain times. This is clearly a related issue but goes beyond supply chain issues to mention ‘over-provision’ of robust public services rather than running them hot. This is a conclusion I drew with some colleagues, looking at NHS hospital productivity in 2020. Ernst writes: “The countries that provided relatively abundant public services managed to fare significantly better in containing and managing the pandemic.”

This is an assertion – there is no evidence provided here to support it – but one well worth testing. More broadly, we need to start thinking about risk-adjusted productivity measures: what’s the climate risk impact on agricultural productivity for example?