Analysis by UKH showed this new approach may fail to deliver widespread job opportunities across the UK.
The Social Productivity Index, compiled by UKH using ONS data, challenges the conventional measure of economic success based solely on GDP and financial productivity.
The index demonstrated sectors with the highest economic productivity often generate the least social value and fail to provide accessible opportunities across different regions.
In contrast, foundational sectors like hospitality excel at delivering growth more broadly, creating a positive social impact and also ensuring social and geographic accessibility.
UKH chief executive Kate Nicholls said: “There is so much more to growth than just raw economics, as our new Social Productivity Index reveals”.
She cautioned “a tunnel vision approach to growth, which relentlessly pursues a narrow definition of economic growth alone, would risk creating a prosperity postcode lottery.”
Nicholls elaborated on the potential negative consequences, explaining that such an approach “will only benefit small clusters around the country, mainly in the South East, and sectors that deliver real change felt by real people would be overlooked.”
Economic productivity
She warned this could “leave swathes of the North and the Midlands behind, and fail to deliver on the Government’s ambition to help more people back into work.”
The analysis highlights the strengths of foundational sectors, with hospitality ranking first in employing part-time workers, under-25s, and providing access for non-graduates.
The sector also performs strongly in geographic spread, gender balance, employment of non-white British team members, and the proportion of people in managerial roles without a degree.
“Hospitality’s ability to support jobs and communities in every part of the country, offering career opportunities for all and driving social mobility are the qualities the Government needs to get more people back into work,” Nicholls asserted.
UKH argued current Government policy, particularly the Industrial Strategy, needs to acknowledge and support sectors that deliver this broader social value to achieve genuine national renewal.
“The index lays bare that high economic productivity sectors are simply not able to perform this role and will not help people back into jobs,” Nicholls emphasised.
Fair economy
She added: “Hospitality can be the catalyst for both economic and social growth across the UK, not just in major economic hubs.
“The Government should look to businesses like ours to achieve its mission of bringing about a more equitable and fair economy and society.”
To better leverage the potential of hospitality and the foundation economy, UKH has put forward three recommendations for the Government:
•Include social productivity and geographical distribution of growth alongside economic productivity in impact assessments and public policy development.
•Establish location-based strategies for areas and sectors marginalized by concentrated high-economic productivity sectors to reduce regional inequality and ensure equitable economic opportunities nationwide.
•Conduct analysis to understand how high social productivity sectors, like hospitality, contribute to the success of high-economic productivity sectors.
