The dispersion of services sector productivity is more than 50% higher in the UK than in other advanced economies (Chart 20a). It has also widened by materially more in the UK. Even in a world of long and lengthening tails of low-productivity companies, the UK is a striking outlier. One potential explanation for this longer tail of UK companies than elsewhere is poor management practices. Using the database developed by Bloom and Van Reenen (2007), we can plot a normalised distribution of management skills for a subset of UK firms. 51  This suggests (a lack of) management quality is a plausible  candidate explanation for the UK’s long tail of companies, as Bloom and Van Reenen find (Chart 21). Looked at quantitatively, there is a statistically significant link between the quality of firms’ management processes and practices and their productivity. And the effect is large. A one standard deviation improvement in the quality of management raises productivity by, on average, around 10%. This suggests potentially high returns to policies which improve the quality of management within companies. Decomposing the Distribution  We can go further in uncovering some of the characteristics of the companies in the upper and lower tails. Might they simply reflect sharp regional differences in productivity, with frontier companies clustered in some regions and laggards in others? Might it simply reflect some sectors, such as manufacturing, generating higher levels of productivity and sitting in the frontier while others, such as services, occupy the lower tail?
We do not conduct large-scale investigations that we document and leave behind us; we describe our own experiences and allow our colleagues to consider whether these experiences may be of any use in their own work. We in Sweden and at the Riksbank have achieved quite a lot that has turned out well over the years, but we have also done a lot that we feel with hindsight could have been done better. For instance, we are proud of how we came through the bank crisis at the beginning of the 1990s, but not of how we got into it. This is the type of experience that no textbooks or courses can convey in the same way as people who were there when it actually happened. Our colleagues are usually interested in everything, but particularly in learning from others’ mistakes. We also consider it important that the Riksbank’s employees learn from the cooperation – that is one of the ideas behind a “Staff Exchange Programme”. Encountering activities that are similar to your own workplace’s, but are conducted under different external conditions always gives reason for consideration and reflection. Our programmes are therefore of great professional interest to our employees and most of them return from their trips with new and often unexpected experiences. Our cooperation with Sida has been excellent, although we sometimes hear that we have not spent as much money as expected. A few experts and their trips do not cost very much. The cooperation with the embassies is also very important.