In December 2001 the EEF produced "Catching up with Uncle Sam", comparing the performance of UK and US manufacturing on a number of key aspects of productivity. "Bridging the Continental Divide" is the latest in a series of studies examining the UK's productivity gap with the US and EU, argues that government policy should be refocused to improve investment in manufacturing, and combined with action to develop skills and innovation, to close the productivity gap with continental competitors. The EEF is particularly concerned that the number of manufacturing foreign direct investment (FDI) projects is falling in the UK while rising in France. This signals that the environment for UK manufacturing is becoming less favourable compared to elsewhere in the EU. The report shows that where the UK is ahead - on labour market flexibility and with a lighter regulatory regime - this is in danger of being eroded. The report outlines that for UK manufacturing to retain and improve the flexibility required to be competitive, action is needed both to improve the skills that underpin it and minimise regulation that can inhibit it. Alternative Download