Why do Firms (not) Invest?

Why do firms invest when they do and not necessarily when they should? Are firms too cautious to invest? Or just realistic about uncertainty? Is the real investment gap about money or about mindset?

This episode of Productivity Puzzles explores why the UK has invested less than its peers, drawing on two brand-new studies from The Productivity Institute: one looking at how firms invest, the other at how managers think.

Host Professor Bart van Ark is joined by:

• Tera Allas, Honorary Professor at Alliance Manchester Business School, Chair Advisory Board, at The Productivity Institute.
• Stephen Roper, Professor of Enterprise at Warwick Business School, founding Director of the Enterprise Research Centre, Co-Director of the Innovation Research Caucus, and Research Programme Lead on “Firms in Transitions” at The Productivity Institute.
• Catherine Mann, Honorary Professor at Alliance Manchester Business School, External Member of the Monetary Policy Committee at the Bank of England, Programme Lead on “Finance and Investment” at The Productivity Institute.

For more information on the topic:

E. Golubova, S. Roper (2026) Understanding productive investment decisions: Investment patterns and decision-making processes, The Productivity Institute and Enterprise Research Centre.

T. Allas, S. Roper (2026) Ambitious but risk averse: UK manager attitudes and the investment gap, The Productivity Institute.

C. Mann (2026) Finance, Investment, and Productivity: Distillation and Synthesis of TPI Research Programme on Finance. Productivity Insights Paper No. 085, The Productivity Institute.

T. Allas, D. Zenghelis (2025) The UK’s capital gap: a short-fall in the trillions of pounds that will take decades to bridge. Productivity Insights Paper No. 055, The Productivity Institute.

C. Mann (2024) UK Business Investment: Economists, Managers, Financiers. An Integrated Framework to Analyse the Past and Underpin Prospects. Productivity Insights Paper No. 036, The Productivity Institute.

Productivity Puzzles podcast, Business Dynamism: is turbulence good for productivity?, The Productivity Institute.

Y. Xue, C. Mann (2026) Cost of Capital and Investment: Evidence from the UK. Working Paper No. 072, The Productivity Institute

S. Roper, R. Owen (2026) The early-stage, equity-finance journey of potential high-growth companies in the UK, Department for Business and Trade.

About Productivity Puzzles:

Productivity Puzzles is brought to you by The Productivity Institute, a research body involving nine academic institutions across the UK, nine Productivity Forums throughout the nation, and a national independent Productivity Commission to advise policy makers at all levels of government. It is funded by the Economic and Social Research Council.