Merry Christmas

To those of you who celebrate Christmas, we wish you a Merry Christmas. To those of you who don't, we hope you have a great time anyway. And we hope you have lots of ideas and plans to make 2010 productive and rewarding.

Shipping Sinks

The global shipping industry is struggling with overcapacity and falling productivity in the face of the economic downturn and shrinking world trade, according to the United Nations Conference on Trade and Development(UNCTAD) last week.

The industry is also suffering from the much-publicised growth in piracy.

And if owners want to get out, they can't afford to because scrap metal rates are so low, that they have to hang on to their ships and ride out the economic downturn.

Sorry, but I have no good news for them!

Australian Book Wars

The Australian Federal Government has just turned down recommendations that would have made books cheaper ... in effect siding with the Publishers Association who saw the recommendations as a threat to the (local) industry.

For me, though, the interesting point is that the recommendation to change the regulations came from the Productivity Commission .... good to see the word 'productivity' taken so widely!

UK not out of the woods, yet

The Bank of England has suggested that a squeeze on company profits as productivity falls faster than wages could trigger another wave of job losses in the New Year.

So far in this recession, by agreeing to pay cuts and shorter hours, many employees have been able to stay in work.

But though wage costs have dropped, productivity has fallen faster. Not a recipe for recovery!

Beware the data ... who is doing the counting?

The picture that the US government (and the wider public) get about the financial health of the country is distorted by the way in which data are gathered and analysed. This is the claim from last week's gathering of economists from academia and government determined to come up with a more accurate statistical picture.

The fundamental shortcoming is in the way imports are accounted for. A carburettor bought for $50 in China as a component of an American-made car, for example, often shows up in the statistics as if it were the American-made version valued at, say, $100. The failure to distinguish adequately between what is made in America and what is made abroad falsely inflates the gross domestic product, used in national productivity calculations.

“We don’t have the data collection processes to capture what is happening in a real time way, or what is being traded and how it is affecting workers,” said Susan Houseman, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Michigan., who has done pioneering research in the field. “We have no idea how to measure the occupations being offshored or what is being inshored.”

The statistical distortions can be significant. At worst, the gross domestic product would have risen at only a 3.3 percent annual rate in the third quarter instead of the 3.5 percent actually reported, according to some experts at the conference. The same gap applies to productivity. And the spread is growing as imports do.

Korean Challenge

Korea's long-term challenges are different from other parts of Asia and they include raising productivity in the service sector, a high-ranking official of the International Monetary Fund said recently.

Korea should increase productivity in the service sector and needs structural reforms to create a smoother relocation of resources and reforms in the labour market and small- and medium-sized enterprises, Anoop Singh, director of the Asia Pacific department of the IMF, said in a conference in Seoul.

Korea has a rebalancing challenge ... The nation's dependency on exports has gone up in recent years, he said.

Singh added that policy stimulus in Asia generally needs to be maintained until the recovery is ensured.

Public Sector looking for help

The drive to increase productivity is the number one concern for government organisations across the globe. Most countries are cutting funding and looking for government agencies and organisations to take up the slack. As an example, in Australia, Telstra’s Government Productivity Report which surveyed 200 government executives across federal, state and local levels, found that productivity (ranked by 84 per cent as a priority) outranked delivering better front line services (73 per cent), reducing costs (67 per cent), risk management (61 per cent) and attracting and retaining staff (57 per cent) as priorities.