While the world adapts to geopolitical changes, productivity has never been more important.

Economic growth is a high priority for world governments, and improving productivity is vital to meeting growth targets. The UK currently places 25th on the global labour productivity performance table – worryingly beneath the G7 average and other comparable economies.

In the current economic climate, businesses are bound to be feeling the pinch, in terms of costs, skills and growth opportunities. As industries and governments look to be competitive, businesses must re-evaluate their approach to productivity methods. By looking inwards at the changes they can control, and boosting their productivity, businesses can continue to thrive.

Productivity in 2025

Productivity can seem straightforward – after all, isn’t it solely focused on working harder to generate more output? But, under the surface, it is a lot more than just that. In 2025, organisations need to ensure that productivity metrics align with delivering growth, but not at the expense of exhausting workers.

Though it may sound like a cliché, the adage of ‘work smarter, not harder’ embodies the principles that should be at the heart of any productivity strategy. Modern businesses cannot maintain the old model of measuring effectiveness purely on more coming out than going in, without any regard for quality or value – both key differentiators and a source of competitive advantage.

The time has come for businesses to take a holistic view of productivity models, considering additional factors such as technology, employee skills and innovation. This approach provides organisations with a more comprehensive overview of the work being carried out, and through consistent monitoring and informed decision making, businesses can achieve higher productivity levels and better overall performance.

The driving force of technology

In times of economic uncertainty, it is to be expected that businesses grow more cautious with their spending. However, this can result in missed opportunities to improve productivity in favour of cost reductions. While cutting costs can seem an attractive option in light of economic doubts, it is merely a short-term solution. When businesses hold back from knee-jerk reactions and maintain a focus on sustainable productivity gains, they will find themselves reaping rewards in the long term.

Strategic investments in technology solutions are essential to support businesses in driving their productivity strategies forward. With new technology constantly being introduced, there are a lot of options for business decision makers to consider. Most obviously, there are technology features in our ERP systems, and in our project management and collaboration tools, that can be used to facilitate significant flexibility or performance advantages compared to legacy approaches and processes.

While these investments may prove expensive at the offset, the long-term benefits will soon outweigh these costs, reducing overall business costs, saving time on tedious tasks, reducing workloads and increasing motivation.

The impact of AI

The biggest technological advancement in recent years has been generative artificial intelligence (GenAI), and it can prove hugely beneficial to businesses looking to improve productivity.

AI-powered automation, when implemented effectively, greatly helps businesses to improve their productivity levels. Repetitive and time-consuming tasks can be taken on by AI agents, freeing up employees to focus on more strategic activities. On top of this, AI can be used to provide tailored training programs for employees, helping them acquire new skills, stay up to date with industry trends, and ultimately providing greater job satisfaction.

Because AI is moving so quickly, constantly evolving as newer models are developed, organisations must be prepared to adapt their policies in light of any changes or issues that arise. Only when implemented responsibly will AI provide businesses with significant productivity gains and long-term success.

There is one misstep to avoid though – many organisations have made the mistake of thinking that they can replace humans with AI (e.g. chatbot agents). This is a false economy and the real benefits come, not from replacing humans with AI, but from employing people who embrace AI tools. Added to that, when using these tools, the trick is not to blindly accept the AI responses, but to apply human intuition and critical thinking, to complete the action.

Adapt to survive

While technology is a vital part of any innovative productivity model, it’s just one piece of the puzzle. It is no use installing modern technology if internal processes remain outdated.

Businesses must also look to weed out inefficient practices to improve and streamline resource management. By working to evolve and adapt their processes, businesses can reduce costs, improve employee satisfaction and provide a better customer experience.

As economic volatility remains a key issue on the minds of business leaders, and with labour markets struggling to hire and retain employees, it has never been more important that organisations put greater stock in their staff training and wellbeing initiatives.

Reducing the levels of staff turnover and building up key skills within a dedicated workforce is vital for any business looking to improve their productivity metrics. With the right processes in place, businesses will see the knock-on impact on additional productivity issues, such as regulatory compliance and risk mitigation. By prioritising modern processes, organisations will see a drive towards continuous improvement and innovation initiatives. Only then will organisations begin to build smarter and more effective productivity strategies that result in greater long-term performance and results.

Ultimately, the key to any effective productivity model is balance. Combining people, technology and processes into one optimal strategy will enable businesses to stay on top during times of economic turmoil, sustaining growth, remaining competitive and ensuring long-term success.

Mark Wilson is technology and innovation director at Node4.

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