Alliance Manchester Business School said on Friday it will host a new institute funded by the UK’s Economic and Social Research Council (ESRC) to make the British economy more productive.

The new £32 million Productivity Institute is being funded by £26 million from ESRC and £6 million from Alliance Manchester Business School and its partner institutions for five years, from September 1, 2020.

UK Science Minister Amanda Solloway said: “Improving productivity is central to driving forward our long-term economic recovery and ensure that we level up wages and living standards across every part of the UK.

“The new Productivity Institute and LSE’s innovative research will bring together the very best of our researchers, boosting our understanding of the different drivers of productivity and helping people and businesses produce and earn more in every area of our economy.”

The business school, part of The University of Manchester, will partner with eight other institutions across the country in a bid to help policy and business leaders across the UK understand how to improve productivity and living standards as the economy begins to recover from the impact of COVID-19.

Professor Nancy Rothwell, President and Vice-chancellor of The University of Manchester, said: “This is a landmark investment by the government.

“It demonstrates how serious the government is about solving the UK’s productivity puzzle and importantly, it signals a commitment to help create an economy that works for everyone, with growth that is sustainable, inclusive and regionally distributed.

“We are proud to lead a group of some of the UK’s most prestigious institutions to tackle what is perhaps the greatest economic challenge of our times and to do so from our region, with its rich heritage in productive growth.”

The Institute will be led by Professor Bart van Ark as managing director who has been appointed to a Chair in Productivity Studies at Alliance Manchester Business School and was previously Chief Economist at The Conference Board in the US.

Professor van Ark will be supported by over 40 “co-investigators” who are world-renowned experts in their fields, including Professor Anthony Venables of the University of Oxford, who will be appointed as the Institute’s Research Director; Professor Diane Coyle of the University of Cambridge; and Professor Jagjit Chadha at the National Institute of Economic and Social Research.

Professor van Ark said: “For many years the UK has grappled with how to create better jobs and boost productivity, thereby increasing people’s prosperity around the country.

“The COVID-19 recession makes it time for a fresh look at these challenges.

“If we are to reboot the economy we need jobs that create high value, use economic and natural resources efficiently, and drive sustained growth through technological change and innovation.

“Productive jobs will pay more and improve people’s well-being.

“Working closely with businesses, policymakers and other stakeholders across the nation and sharing insights with other countries, we aim through our research and engagement to develop practices and policies to encourage more productive and inclusive growth across the UK.”

Professor Fiona Devine, Head of Alliance Manchester Business School, said: “This landmark project shows how business schools act as a force for good for the whole of society.

“By taking our original thinking and research and applying them to a huge economic challenge, we can play our part in building a stronger working UK economy with all the benefits that brings to people and businesses right across the country.”

The partner institutions supporting Alliance Manchester Business School are: University of Cambridge, the National Institute of Economic and Social Research, University of Glasgow, University of Sheffield, King’s College London, Queen’s University Belfast, Cardiff University, University of Warwick.

The Productivity Institute will also collaborate with the Economic Statistics Centre of Excellence (ESCoE) and with organisations outside of the UK, including the Organisation for Economic Co-operation and Development (OECD) in Paris.