Saturday 29 August 2015

I hope i'm wrong,

The Taiwan government is planning to spend NT$36 billion (US$1.12 billon) over the next nine years as part of its Productivity 4.0 project to elevate Taiwan's status in the global supply chain, Taiwan president Ma Ying-jeou said recently.
Over the period, the government will spend NT$4 billion (US$124.4 million) each year on electronics/information technology, metals, transportation, machinery, foodstuffs, textiles, distribution and agriculture, helping to build smart factories to realize massive but diversified production, Ma said.
It is hoped that by 2024, the per capita productivity of Taiwan's manufacturing industries will have grown 60% compared with last year to NT$10 million (US$310,900), said the president.
Now, if I were a betting man (which I'm not) I would put money on failure ... though I hope I'm wrong.  Government's job is to build infrastructure (especially the right macroeconomic climate) and then 'get out of the way.

Saturday 22 August 2015

Choice

All companies have limited funds to invest in new projects. (Well, perhaps Apple has all the money it needs.)

And this inevitably means that those companies have to prioritise certain projects over others.

Unfortunately too many firms seem to concentrate on physical assets -new buildings, new technology, new equipment - and forget about new knowledge and new skills.

Too few business leaders believe what they say when they utter those words "Our people are our greatest asset".


Saturday 15 August 2015

Do we want to invest?

Businesses seem to be unwilling to invest in new facilities and even new skills for their employees.

I think part of the reason is that investors have become used to the rollercoaster of the tech boom and bust cycle.

On the one hand, many expect new technology to keep arriving and providing them with relatively cheap productivity gains.

Others are reluctant to invest as they see new tech as a 'fad', rather than as a proper contribution to improved performance.

It is time to see productivity improvement as a 'journey' not a destination. Like all journeys, it needs planning snd preparation ... but above all it needs a clear route. It also needs energy and focus - it won't just happen.  And it needs resourcing - it needs the development of infrastructure and skills, of thought and ideas.

Let's focus our energies, and our investments, on improving productivity - we can make the difference.

Saturday 8 August 2015

What about Google?

Last week I talked about the problem of national productivity measurement when we fail to count lots of 'intangibles.

Musing further, I got to thinking  about companies like Google and Yahoo who give away many of their services for free (at least to the end user at point of use). Google and Yahoo put lots of energy and resources into these services - and they clearly benefit the US economy - but they don't get counted in the official GDP figure.

This situation clearly affects the US - but also lots of other developed countries.

We need to think again about how we measure national productivity. 

Saturday 1 August 2015

Balancing the right measures

When coming up with the Balanced Scorecard concept, Kaplan & Norton reminded us of the need for balanced measurement - focusing on a number of important factors.

Yet when we measure and discuss national productivity, it is almost always in the context of a single measure - GDP per employee or employee-hour.

There is a growing view that this measure is not just 'unbalanced' but out-of-date.  It is a measure very suitable for older, manufacturing-based economies but fails to recognise the nuances of knowledge-based economies.

It 'counts' tangible assets within GDP (cars, widgets, fridges, etc) but does not gather data on intangible assets like patent portfolios, bright young people and so on.

Financiers and investors have moved on.  When they value a start-up, they do not value the physical assets -  but the intangible, intellectual assets and intellectual property - the ideas.

So, perhaps we need to catch up - and establish measures of national productivity that are suitable for this - and future - centuries.