The Long Haul

I am writing this entry from the European Productivity Conference 2007 in Zilina, Slovakia. Last night the Ministry for the Economy awarded productivity prizes to individuals and companies that have made the most impact on Slovak productivity over the last 10 years. Volkswagen Slovakia won the company award for its long-term commitment to making its production facility in Slovakia one of the highest quality and most productive facilities throughout Europe. This nicely shows that productivity development is not about quick wins and instant success – sustainable productivity development requires constant, incremental improvement and long-term commitment

Bigger bubble

In the last two years, India's GDP has grown by over 9% per annum. Is this sustainable or is the economy overheating?

Well, it seems as though recently there has been a shift to investment-intensive growth alongside continuing growth in productivity. This all augers well for the future and continuing growth seems assured - at least in the medium term.

Free trade boosts productivity

Most of us realise that the macro-economic climate has a big effect on productivity at the national level ... but, of course, this is only because it has its effects at company level. To confirm this, a recent study on Canada's free trade experience suggests that eliminating more trade barriers inside and outside Canada could lead to big leaps in Canadian productivity, which in turn would allow Canada to better fund its social programs.

The study by economics researchers Daniel Trefler and Alla Lileeva, shows that Canadian companies that had low productivity levels before the Canada-U.S. Free Trade Agreement (FTA) was signed increased their productivity significantly after the Agreement came into effect in 1989.

Don't stretch the numbers too far

Somtimes official figures are used for purposes for which they were not intended ... and somtimes they are stretched a bit thinly. Consider the following statement taken from a press release from a Business Park in Edinburgh ...

"We know that the value added by recycling in Yorkshire and Humberside [£76m GVA basic prices] is similar to the value added by fish farming in Scotland [£70m GVA basic prices]."

So!

And then they go on to show that the productivity of workers in their Business Park (as measured by GVA/employee) is higher than China's.

Figures OK ... Conclusion spurious!

(Note: GVA = Gross Value Added)

The Phillipines needs a boost!

The Philippines is lagging behind other members of the Association of Southeast Asian Nations (Asean) in terms of productivity (GDP / employee) ... but worse, the Asean itself is way behind the rest of Asia and the developed world in productivity.

Labour productivity in Southeast Asia has become stagnant compared to the rest of Asia according to a recent report from the International Labor Organization (ILO).

The report measured output per employed person in Southeast Asia at an average annual increase of 1.6 percent only between 1996 and 2006. It showed that Singapore is the most productive country in the Asean with its US$47,975 of value added by each person employed followed by Malaysia's US$22,112, Thailand's US$13,915, Indonesia's US$9,022 and the Philippines' US$7,271.