This or That-ism? Growth myths that are holding back the economy

Through our years of extensive research and practice at the Centre for Progressive Policy (CPP)—particularly via our Inclusive Growth Network (IGN)—we've identified several persistent, dichotomous ‘this-or-that’ myths that must urgently be abandoned if we're to (in Labour’s words) kickstart growth everywhere. 

Myth 1: High-wage vs low-wage sectors 

The foundational economy - lower wage sectors like retail, social care and hospitality - is too often overlooked in industrial strategies and growth plans, despite employing nearly 40% of the workforce. In 2021, the UK ranked 22nd out of 28 OECD countries in low-wage sector productivity.  

As CPP’s recent analysis showed, closing the UK’s labour productivity gap in these sectors could deliver far greater economic gains than widely acknowledged. Raising productivity in low-wage sectors to the OECD average of $40.81 per hour would add $126 billion (£105 billion) to GDP. 

But it’s not just the UK’s position globally that’s concerning, it’s the deep inequalities within its own borders. In London alone, low-wage sector productivity varies widely, from £16.67 per hour in Haringey to £56 in Lambeth. 

Closing productivity gaps in the foundational, everyday economy - both within the UK and against other economies - would boost overall economic performance while tackling the UK’s broader productivity and inequality problem. This isn’t about shifting focus away from high to low-productivity industries but recognising that a thriving economy needs both to be performing well. 

Myth 2: Cities vs Towns

Much of our economic model relies on a few major cities - mostly London - making UK a highly regionally lopsided economy. But the notion that larger cities must always outpace smaller ones is flawed and must be challenged.  

Sweden actively works to prevent its largest cities from dominating by investing in infrastructure, education, and innovation in smaller towns and rural areas. Similarly, Finland’s "mixed growth models" involve both large and medium-sized cities driving national growth, thereby avoiding the concentration of economic power in a single area. In Germany, mid-sized cities like Munich, Stuttgart, and Leipzig are crucial drivers of national growth, thanks in part to a decentralised banking system that supports small and medium-sized enterprises (SMEs) across the country. Balanced development isn’t just possible; it’s proven.

What’s more,  places outside the big cities often get overlooked in conversations of growth. While cities are undoubtedly hubs of innovation, finance, and infrastructure, these areas too have significant economic potential. CPP’s analysis showed that many towns, especially in the North and Midlands, have high-potential industries that have shown impressive productivity growth, especially in manufacturing. By directing business investment into these communities, the UK could unlock £70 billion in economic growth.

Myth 3: Growth vs inclusion 

The old growth versus equality debate, the so-called equity versus efficiency trade-off, is deeply entrenched - but increasingly outdated. From regional to income to gender inequality, evidence shows that growth and equality are not antagonistic, but mutually reinforcing.

OECD analysis found that cumulative growth rates in Italy, the UK, and the US would have been 6–9 percentage points higher had income disparities not widened. CPP research estimated that £160 billion in economic output could be unlocked by closing gaps in local productivity drivers like life expectancy, skills, and employment rates by gender. Gender inequality alone costs at least £23 billion annually, while policies like paternity leave - often dismissed as non-growth initiatives - could add £2.6 billion to output.

In short, it's never growth vs equality 

At CPP, we’re not just challenging this dichotomous thinking; we’re working with partners to support places in developing solutions. As we evolve into a new network of strategic and local authorities focused on inclusive growth and reform, we’re drawing on nearly a decade of work to embed a model of inclusive growth that delivers results for everyone - free from the shackles of this or that-ism.  

The challenge is clear. The evidence is there. The opportunity is now.