How can the UK improve its productivity? I went to Legoland to find out

8th September, 2022

Few parts of the British economy are as meticulously observed by this columnist as Legoland, a theme park within sight of Windsor Castle. Each July, my son and I have sampled the delights of the Dragon rollercoaster and the Viking River Splash, endured the rigours of long queues, and over the years have had ample opportunity to ponder what Legoland can teach us about economic productivity.

Productivity is one of those things that you can’t have too much of, like competent politicians or pleasant weather, and which the UK lacks more than most. Output per hour has been lacklustre in many countries since the financial crisis, but the UK has stagnated more than its peers. So how can the UK improve its productivity? I didn’t expect to find the answers at Legoland, but I did hope that it would help me to ask better questions.

First, where are the bottlenecks? For Legoland, the key constraint is the capacity of the rides. If (hypothetically) 20,000 people buy tickets to spend the day at the park, but Legoland’s attractions can only deliver 10,000 rides an hour, then one way or another visitors will have to wait two hours between each ride. That isn’t likely to prove sustainable.

The most obvious way to improve capacity is to invest in new attractions. Legoland does this, but Helen Bull, the boss of the Legoland Windsor resort, told me that there is a cycle of investment in the resort: a year or two of high investment will be followed by years with lower capital spending. As Legoland opened its fancy new Sky Lion ride last year, this implies that we may be waiting for a while before the next big attraction is built.

Could British businesses invest more? The Bank of England certainly thinks so; in 2017, it found that UK businesses persistently aimed for (and achieved) a nominal return on capital investment of 12 per cent, despite the fact that the cost of debt fell after the financial crisis from around 6 per cent to 3 per cent. When a business can borrow at 3 per cent to earn 12 per cent, one has to wonder what is stopping it from borrowing and investing a little more.

The Bank of England’s research blames inertia, excessive risk aversion after the trauma of the financial crisis and, above all, uncertainty. When businesses have no idea what is around the corner, they tend to wait and see before investing heavily. The past few years of economic shocks and political tomfoolery cannot have helped.

Even without another big investment, Legoland could get more out of the site with more workers. On my recent visit, the ice-cream kiosks were closed for most of a hot day, and the minor rides were often stationary because only a single staff member was present to supervise loading. But it cannot be easy to recruit a seasonal workforce, particularly since British politicians have been so keen to emphasise restrictions on immigration.

Could Legoland get a productivity boost from new technologies? Perhaps. The most obvious example is the Sky Lion ride, which adds a large digital projector to some judiciously choreographed physical effects (tipping, vibrating, squirts of water and blasts of hot air) to produce the illusion of dramatic swoops. It’s a credible rival to the large physical rollercoasters, and presumably will be vastly easier to refresh after a few years.

Legoland is also trying to use smartphone apps to organise both staff and visitors more efficiently. Staff no longer monitor the park from desktop computers in a nearby office; they can see how the park is doing in real time on a tablet. Visitors can also use apps to buy tickets, reserve rides or find shorter queues. (The app also offers augmented reality, but I have not been able to make it work.) Ultimately, though, all this computing power seems as marginal for productivity growth at Legoland as it has been in many other parts of the economy. Radical change is often required to unlock new technologies.

Or perhaps we are thinking about productivity all wrong? After all, it is reductive to measure the “output” of Legoland in terms either of pounds spent or even rides provided. The desired output is a fun day, fondly remembered, for as many people as possible.

Diane Coyle, professor of public policy at Cambridge, and Leonard Nakamura of the Philadelphia Fed have recently been advocating an alternative measure of economic progress that focuses on how people spend and enjoy their time. Their perspective sheds light on the blurring of work and home life. In the case of Legoland, it suggests that since queues at theme parks are an inevitability, perhaps more should be done to make the queues themselves pleasant.

Fortunately for theme parks everywhere, behavioural science tells us that a long queue for the rollercoaster will be largely forgotten; we recall instead a few thrilling moments right at the end. For Legoland that is perfectly satisfactory. It is just a shame that “focus on the good stuff and shove the rest down the memory hole” now appears to be the central plank of the UK’s economic strategy.

Written for and first published in the Financial Times on 29 July 2022.

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