Improving the policy impact of academic work - in topics of productivity industry employment skills and other areas of NIESR expertise
Lead Research Organisation:
National Institute of Economic and Social Research
Department Name: National Institute of Economic & Soc Res
Abstract
This Knowledge Exchange fellowship has two strands
i. The Engagement focus aims to increase government use of academic work, by increased engagement between BIS and NIESR through a) a series of seminars for policy people, b) review of processes for government research and data management, and c) improved communication of the policy perspective.
ii. The Research focus aims to undertake analysis of firm level data and explore the potential to extend the findings in the literature in order a) to gain greater impact on policy development from academic knowledge, and b) identify and develop potential for further policy relevant research from these areas of NIESR expertise.
The Engagement focus of the project contains different elements:
a. Seminars. NIESR has agreed to arrange a series of 4 seminars on BIS policy topics over the 12 months of the fellowship. These will involve experts from the academic community, including ESRC centres such as SKOPE, and will be open to government officials from BIS and other departments. The topics are likely to include areas such as macro-economic projections, migration and the labour market, and sources of productivity gain.
b. Research and data processes. The opportunity of the Fellowship will be used to improve academic links with government processes for research and data where possible. The aim is to develop and provide greater feedback to academic bidders on the features of weaker bids, and how to strengthen them.
c. Policy context. As well as policy relevant seminars, other steps will be taken to ensure that BIS priorities are conveyed to the academic community. The approach will be to arrange a workshop for academics, hosted by NIESR, and invite policy leads from government to provide feedback on what has worked for them.
The Research focus will use firm-level micro-data to explore the relation between the dynamic economy (firms closing and opening, growing and contracting, improving and declining) and productivity, the labour market, and one or more of skills, innovation, high growth firms, sectors and clusters. The approach is to explore the potential of these data for greater insight and impact, rather than direct data analysis - in recognition of the challenges presented by the patchy documentation, and inconsistent data records.
The starting point is the finding that the great majority of productivity gain arises from 'external restructuring' of firms or plants (80-90% of Total Factor Productivity according to Disney et al (2003), and greater according to Harris and Moffat (2012). At first sight this seems surprising - it suggests that little productivity gain occurs within existing firms or plants.
The implication is sometimes drawn that economic churn amongst firms is the route for growth rather than improvement within firms. The picture could in fact be different. The empirical literature appears to focus mainly on churn among plants rather than firms and there is little detail on how much of the gain occurs between plants but within firms, and how much between firms. This is the first question that will be explored.
The second stage will consider how this decomposition varies over time, under different macro-economic circumstances. The literature suggests there is some but not much variation. One would expect the components of change to differ at times of growth from times of contraction or recession.
The third stage will assess the feasibility of separating the decomposition by firm size, as churn is likely to operate rather differently for small firms than for middle or larger ones. Policy on investment in areas such as skills or innovation will be informed and influenced by the findings.
The fourth stage will explore the potential for future work in one or more policy areas - skills and training (building on work by Haskel et al 2003, Dearden et al 2005, and Galindo-Rueda et al 2005), in innovation, or employment.
i. The Engagement focus aims to increase government use of academic work, by increased engagement between BIS and NIESR through a) a series of seminars for policy people, b) review of processes for government research and data management, and c) improved communication of the policy perspective.
ii. The Research focus aims to undertake analysis of firm level data and explore the potential to extend the findings in the literature in order a) to gain greater impact on policy development from academic knowledge, and b) identify and develop potential for further policy relevant research from these areas of NIESR expertise.
The Engagement focus of the project contains different elements:
a. Seminars. NIESR has agreed to arrange a series of 4 seminars on BIS policy topics over the 12 months of the fellowship. These will involve experts from the academic community, including ESRC centres such as SKOPE, and will be open to government officials from BIS and other departments. The topics are likely to include areas such as macro-economic projections, migration and the labour market, and sources of productivity gain.
b. Research and data processes. The opportunity of the Fellowship will be used to improve academic links with government processes for research and data where possible. The aim is to develop and provide greater feedback to academic bidders on the features of weaker bids, and how to strengthen them.
c. Policy context. As well as policy relevant seminars, other steps will be taken to ensure that BIS priorities are conveyed to the academic community. The approach will be to arrange a workshop for academics, hosted by NIESR, and invite policy leads from government to provide feedback on what has worked for them.
The Research focus will use firm-level micro-data to explore the relation between the dynamic economy (firms closing and opening, growing and contracting, improving and declining) and productivity, the labour market, and one or more of skills, innovation, high growth firms, sectors and clusters. The approach is to explore the potential of these data for greater insight and impact, rather than direct data analysis - in recognition of the challenges presented by the patchy documentation, and inconsistent data records.
The starting point is the finding that the great majority of productivity gain arises from 'external restructuring' of firms or plants (80-90% of Total Factor Productivity according to Disney et al (2003), and greater according to Harris and Moffat (2012). At first sight this seems surprising - it suggests that little productivity gain occurs within existing firms or plants.
The implication is sometimes drawn that economic churn amongst firms is the route for growth rather than improvement within firms. The picture could in fact be different. The empirical literature appears to focus mainly on churn among plants rather than firms and there is little detail on how much of the gain occurs between plants but within firms, and how much between firms. This is the first question that will be explored.
The second stage will consider how this decomposition varies over time, under different macro-economic circumstances. The literature suggests there is some but not much variation. One would expect the components of change to differ at times of growth from times of contraction or recession.
The third stage will assess the feasibility of separating the decomposition by firm size, as churn is likely to operate rather differently for small firms than for middle or larger ones. Policy on investment in areas such as skills or innovation will be informed and influenced by the findings.
The fourth stage will explore the potential for future work in one or more policy areas - skills and training (building on work by Haskel et al 2003, Dearden et al 2005, and Galindo-Rueda et al 2005), in innovation, or employment.
Planned Impact
The primary focus of this Knowledge Exchange project is on increasing the impact of academic thinking on government policy.
The aim is that public policy will benefit from the increased use of academic literature, and that the academic community will benefit from greater interest by users in their work, and greater support and investment in it.
The intention is to build on Bob Butcher's contacts at a senior level in BIS, and his networks across government analysts, and across academia, to create dynamic and effective seminars or workshops and bring together academic thinking with policy priorities.
NIESR has agreed to arrange a series of 4 seminars on BIS policy topics over the 12 months of the fellowship. These will involve experts from the academic community more generally, including ESRC research centres such as SKOPE, and will be open to government officials from BIS and other departments. They are likely to be of interest to Treasury, Cabinet Office, and DWP. The topics are likely to include areas such as macro-economic projections, migration and the labour market, and sources of productivity gain.
Wider impact will be achieved through writing up and disseminating the outcomes of the seminar, including contribution to live policy debates where possible.
Contacts with policy leads will provide material on barriers and opportunities for improving impact on policy (for example some policy people express frustration at insufficient responsiveness from academics and the project can explore ways to address this).
As part of the project we will explore reported frustrations felt by government policy leads in not getting sufficient engagement from the academic community in addressing policy priorities, to understand the causes and assess options and to move the issue forward. For example while there is good macro-research in some areas, there is not a large volume.
The data analysis strand of this project will look at the ONS longitudinal firm-level data and its potential for informing policy in a range of areas, from productivity, through skills, enterprise and innovation. It is a policy-focused piece of work, with implications as much in mind as the exploration of specific research questions, such as the extent of productivity gain arising from churn among firms as opposed to churn among plants or gain within firms.
An important step for policy leads is that they come to expect and demand an academic literature base in their policy area. The project will encourage that expectation by examples of where public policy in other areas, such as bank independence, exist already.
The aim is that public policy will benefit from the increased use of academic literature, and that the academic community will benefit from greater interest by users in their work, and greater support and investment in it.
The intention is to build on Bob Butcher's contacts at a senior level in BIS, and his networks across government analysts, and across academia, to create dynamic and effective seminars or workshops and bring together academic thinking with policy priorities.
NIESR has agreed to arrange a series of 4 seminars on BIS policy topics over the 12 months of the fellowship. These will involve experts from the academic community more generally, including ESRC research centres such as SKOPE, and will be open to government officials from BIS and other departments. They are likely to be of interest to Treasury, Cabinet Office, and DWP. The topics are likely to include areas such as macro-economic projections, migration and the labour market, and sources of productivity gain.
Wider impact will be achieved through writing up and disseminating the outcomes of the seminar, including contribution to live policy debates where possible.
Contacts with policy leads will provide material on barriers and opportunities for improving impact on policy (for example some policy people express frustration at insufficient responsiveness from academics and the project can explore ways to address this).
As part of the project we will explore reported frustrations felt by government policy leads in not getting sufficient engagement from the academic community in addressing policy priorities, to understand the causes and assess options and to move the issue forward. For example while there is good macro-research in some areas, there is not a large volume.
The data analysis strand of this project will look at the ONS longitudinal firm-level data and its potential for informing policy in a range of areas, from productivity, through skills, enterprise and innovation. It is a policy-focused piece of work, with implications as much in mind as the exploration of specific research questions, such as the extent of productivity gain arising from churn among firms as opposed to churn among plants or gain within firms.
An important step for policy leads is that they come to expect and demand an academic literature base in their policy area. The project will encourage that expectation by examples of where public policy in other areas, such as bank independence, exist already.
People |
ORCID iD |
| Jonathan Portes (Principal Investigator) |
Publications
Butcher B
(2020)
How Dynamic is the Private Sector? Job Creation and Insights from Workplace-Level Data
in National Institute Economic Review
| Description | 1. Summary of project findings The project undertook to deliver two strands of work: part i) a programme of work on knowledge exchange; part ii) research on economic churn. Both strands aim to improve the impact of academic work on policy. i. A programme of knowledge exchange activity. We led 4 seminars during the year, and other knowledge exchange activities described below. Each of the seminars had a strong audience of policy developers, academics and thinktanks. The 4 seminar topics were: 1. Job creation - how dynamic is the private sector? 2. Hollowing out and the future of the labour market 3. Productivity gain and local growth 4. Issues in analysing firm level data especially for productivity gain. Each of the seminars has its own website at NIESR, links given in the Research Outcomes website. Two seminars have a linked blog and one a published article. We conducted a number of other knowledge exchange activities including a. A study of incentives for academics to engage with policy relevant work. This yielded some surprising findings about the drivers of academic behaviour, the main barrier probably being the leadership of academic professions. A blog was published. We had intended to investigate separately the barriers in engaging with government research, but were not able to do so as the invitation to tender did not yield a suitable investigator in the time. b. Seminar ideas under development, leading to future outcomes: - literacy and numeracy building on OECD work (leading to a number of events, from February to July) - International workshop on local development (will be in 2015) - productivity, based on subsequent outcomes on economic churn - migration (seminar happened in October, but on a different basis than initiated), and leading to subsequent impact on policy - improved links between academics and government policy (eg on migration, high growth firms and access to finance, companies House data, basic skills). ii. Research on economic churn, and improved exploitation of firm level data 1. We undertook analysis of economic churn including job creation and productivity gain. A paper was published in August (link on Research Outcomes), co-authored with Matt Bursnall, BIS. Key findings include - confirmation of huge amounts of churn in the economy with markedly less after the downturn which could reflect stagnation - confirmation that a large proportion of job creation comes from establishing new workplaces (two thirds of the total 4 million jobs created per year before the downturn), but that a portion of those workplaces were in existing firms, so that the role of new firms in job creation was lower than that might at first appear, though still substantial. - recommendation that those undertaking policy development and evaluation pay more attention to the powerful effect of workplaces moving into and out of the economy. 2. We successfully negotiated with ONS and BIS to establish substantially improved access to the confidential firm level data, against the expectations of most people. 3. Workshop. In order to improve exploitation of these data, we arranged a workshop discussion with leading acadmeics on data issues (see seminar list above). 4. We established a self-managing user group for these data within BIS, with a life of its own beyond this project to maintain access to the data and exploitation of the data within BIS. The user group is already taking action, in line with plans, to link with a wider set of academics and to link across government. ESRC requirements There were three specific points the ESRC wanted to see from the project: • Copies of the outputs of the seminars. These are provided at items 2, 4, 7 and 8 in the list of publications and outputs • A short paper on the study, of the link between the dynamic economy and productivity, the labour market and one or more of skills, innovation, high growth firms, sectors and sub-regions, to include aims and objectives, methods and results. This is met by the published article on job creation at reference 1 in the list of publications and outputs. • A brief report on the topic of academic engagement with government research, describing the barriers and potential solutions explored. This is covered by the report at item 5 of the list of publications and outputs. |
| Exploitation Route | Here are impacts in non-academic contexts which are primarily through influence on government policy: i. Local growth. There is a renewed focus in BIS local growth policy in productivity as a key aim, prompted by the seminar and associated discussion. Further work with academics is planned. There has also been direct influence on policy development in connection with devolved budgets (the Heseltine agenda) using knowledge developed by OECD through linking them with policy as part of planning for a future workshop. ii. The future of the labour market and hollowing out. There has been considerable interest among policy makers in this strand of work, as the changes to intermediate pay jobs is of acute political interest and is an ongoing policy concern. Further presentations on this have been provided for DfE Board members and for DWP, with great interest also shown in Treasury. Academics plan further work, and there will be considerable interest from government. iii. Job creation. Our article led to discussion and some controversy in BIS, leading to further work by policy analysts to understand the labour market part of the productivity puzzle better, and to improve links with academic work in the area. iv. Access to data. The project achieved new more exploratory access for policy analysts to confidential data in Virtual Microdate Laboratory (VML). This had been seen as very unlikely to succeed when the project started. As a result policy analysts are now developing forward research programmes for analytical work using these data in a range of policy areas including macro-economic policy, labour markets, enterprise and local growth, and skills. An active VML user group has been established, with plans including greater engagement with academics, and widening the user base to policy leads outside of BIS. Here is a selection of impacts on academic work. i. Hollowing out and the labour market: We published an article which set out areas for future work of policy interest. These have been taken up by Dr Steve McIntosh at Sheffield University. They include a recommendation to be clear about how to define low paid jobs. Defining them in relation to the median can be seriously misleading, as a real increase in high paid jobs leads to an increase in the median and hence an apparent increase in low paid jobs as the % below two thirds the median then increases other things equal. ii. Data issues in measuring productivity: Our seminars and discussions have led amongst other things to the generous release to the Secure Data Service by Professor Harris of his series on capital stocks for each firm in the economy. It is now available to academics on request to the SDS. Three separate projects have taken advantage of this and no doubt others will follow. iii. The article and work on Job creation has led to increased interest and set new standards in the use of the firm level data, on the time-point for the data, and the importance of both the firm and workplace in establishment of new business units. Together with the work on local growth, it has prompted further work on local level job creation. iv. Our article on academic incentives has created some debate on-line and adds pressure on the economist and social research professions to look more broadly than publication in leading journals for academic achievement. Other areas of impact on academics include greater awareness of the approaches to measuring productivity, and greater openness and sharing of code in analysing firm level data. |
| Sectors | Communities and Social Services/Policy,Creative Economy,Digital/Communication/Information Technologies (including Software),Education,Financial Services, and Management Consultancy,Government, Democracy and Justice |
| URL | http://niesr.ac.uk/publications/job-creation-and-recession#.VFu15vlfqgw |
| Description | Impact has been achieved both on academic work, and in non-academic contexts: A. Impacts in non-academic contexts are primarily through influence on government policy: i.. Local growth. There is a renewed focus in BIS local growth policy in productivity as a key aim, prompted by the seminar and associated discussion. Further work with academics is planned. There has also been direct influence on policy development in connection with devolved budgets (the Heseltine agenda) using knowledge developed by OECD through linking them with policy as part of planning for a future workshop. ii. The future of the labour market and hollowing out. There has been considerable interest among policy makers in this strand of work, as the changes to intermediate pay jobs is of acute political interest and is an ongoing policy concern. Further presentations on this have been provided for DfE Board members and for DWP, with great interest also shown in Treasury. Academics plan further work, and there will be considerable interest from government. iii. Job creation. Our article led to discussion and some controversy in BIS, leading to further work by policy analysts to understand the labour market part of the productivity puzzle better, and to improve links with academic work in the area. iv. Access to data. The project achieved new more exploratory access for policy analysts to confidential data in Virtual Microdate Laboratory (VML). This had been seen as very unlikely to succeed when the project started. As a result policy analysts are now developing forward research programmes for analytical work using these data in a range of policy areas including macro-economic policy, labour markets, enterprise and local growth, and skills. An active VML user group has been established, with plans including greater engagement with academics, and widening the user base to policy leads outside of BIS. B. Impacts on academic work. i. Hollowing out and the labour market: We published an article which set out areas for future work of policy interest. These have been taken up by Dr Steve McIntosh at Sheffield University. They include a recommendation to be clear about how to define low paid jobs. Defining them in relation to the median can be seriously misleading, as a real increase in high paid jobs leads to an increase in the median and hence an apparent increase in low paid jobs as the % below two thirds the median then increases other things equal. ii. Data issues in measuring productivity: Our seminars and discussions have led amongst other things to the generous release to the Secure Data Service by Professor Harris of his series on capital stocks for each firm in the economy. It is now available to academics on request to the SDS. Three separate projects have taken advantage of this and no doubt others will follow. iii. The article and work on Job creation has led to increased interest and set new standards in the use of the firm level data, on the time-point for the data, and the importance of both the firm and workplace in establishment of new business units. Together with the work on local growth, it has prompted further work on local level job creation. iv. Our article on academic incentives has created some debate on-line and adds pressure on the economist and social research professions to look more broadly than publication in leading journals for academic achievement. Other areas of impact on academics include greater awareness of the approaches to measuring productivity, and greater openness and sharing of code in analysing firm level data. |
| First Year Of Impact | 2013 |
| Sector | Education,Government, Democracy and Justice |
| Impact Types | Economic,Policy & public services |