The contribution of quality management to the UK economy

The contribution of quality management to the UK economy
Document type
Report
Corporate author(s)
Centre for Economic and Business Research
Publisher
Chartered Management Institute
Date of publication
26 June 2012
Subject(s)
Management & leadership: including strategy, public sector management, operations and production, Trends: economic, social and technology trends affecting business
Collection
Business and management
Material type
Reports

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This research by CEBR for the Chartered Management Institute quantifies the extent of quality management’s contribution to organisations and the wider UK economy. As well as demonstrating the enormous contribution quality management already delivers, this research reveals its even greater potential for the UK economy. Findings include:

  • In 2011, quality management practices contributed £90 billion to Gross Domestic Product (GDP), 6.0% of UK GDP and around £9billion to the Exchequer. If quality management programmes had been rolled out as fully as possible throughout the UK economy, then GDP could have been £52 billion higher in 2011 (a 3.4% increase) and contributed an additional £8.6 billion to the Exchequer.
  • In terms of jobs, the report estimates that quality management programmes, as they were actually instituted in 2011, caused UK economy-wide employment to be 1.4 million higher than it would otherwise have been. It found that, if quality management programmes had been adopted as fully as possible across all sectors of the UK economy in 2011, it could have created an additional 455,000 jobs, a potential increase in UK employment of 1.57%.
  • Organisations implementing quality management could expect an average Revenue Return on Investment (RoI) of 6:1,
    i.e. for every £1 spent on a quality management programme, revenues can be increased by £6, and an average cost saving from quality management of 16:1, that is for every £1 spent on a quality management programme, costs were reduced by £16.

The research also comprised in-depth interviews with UK business leaders, of which 93% agreed that quality management is a key driver of business success and on average identified 4.8% cost savings due to quality management.

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