Auckland is the future?

Auckland in New Zealand, want to grow and become a 'super city' believing that larger cities have a better chance to thrive in a knowledge economy - because people, companies and institutions clustered in close proximity interact creatively to achieve more than they would if widely dispersed. This leads to higher levels of productivity, and higher returns to businesses - and workers.

Of course there are other factors created by size - 'critical cultural mass', for example, meaning that a wider range of cultural events seems to emerge in bigger cities - because specialist audiences become large enough to sustain professional cultural service provision.

The challenge for Auckland is how to achieve an urban environment that will create growth and realise such benefits. Is this always an organic, natural phenomenon or can it be accelerated by appropriate policy intervention? Time will tell!

Royal Society got there first

Those of you who are into the Lean philosphy will probably know of the term 'Go To Gemba' which means that you should never simply trust what you are told; you should go and see for yourself. (Gemba is the japanese for 'truth', so by observing things for yourself, you get to the truth.)

Of course those of you who are not into the Lean philosophy will probably just be thinking ... "Well, that's common sense" ... but it is surprising how often we fail to abide by the rules of common sense.

The neutrals (and perhaps even the rest of you) might be interested to know that the Japanese were certainly not the first to codify this particular piece of common sense. The Royal Society - formed in London in 1660 and still very much alive - has as its motto ... "Nullius in Verba" ... which the Latin scholars amongst you will know translates (very roughly) as "Don't take someone's word for it - check it yourself".

So the Royal Society got there first - by a few hundred years. That's the thing about common sense - its usually been around for a long time!

Ireland needs productivity

Ireland's productivity was €18,850 (GNP) per worker in the 1st quarter of 2008. Over the next 12 months this dropped by about €1,000 per worker as a result of a fall in output of 13%, together with a drop of 8% in the number of workers.

Then in the next 12 months (taking us to the first quarter of 2010), the drop in output was only 4% cent. However, the fall in the number of people at work was slightly greater than this, so there was a small improvement in productivity - in terms of output per worker.

The decline in the workforce is still going on - though more slowly. Ireland thus has to maintain its productivity growth to keep output levels up.

India goes for growth

India is aiming at 9-10% economic growth in the coming years but labour productivity has to improve to sustain high growth, Prime Minister Manmohan Singh said Wednesday. “Our aim is a growth rate of 9% to 10% in the medium term. But this will not happen automatically. There are deficiencies we will have to remove and strengths that we will have to acquire,” Singh said at an award function. “As you all know, India’s economic performance in the last few years has been truly impressive. Our country is poised to move to trajectory of sustained high economic growth, which is so essential for fighting mass poverty, hunger and disease that still afflict millions of our people,” he said.

Policymakers have forecast 8.5% growth in 2010-11, higher than 7.4% of previous year, after a series of stimulus in the form of cuts in interest rates, excise duties and higher public spending. India’s economic growth was hovering around 9-9.7% between 2005-06 and 2007-08, but it slowed to 6.7% in 2008-09 after the global economic crisis trimmed demand and output.

While praising the country’s millions of workers, who have toiled to build India’s infrastructure and industry, Singh said high economic growth could be attained with higher productivity. “To achieve our goals and our ambitions, we will have to enhance productivity across all sectors of the economy. Our resources are limited and need to be utilised optimally,” he said. “I would urge all of you present here to pay greater attention to cutting costs and boosting the quality of the products and services that our country produces,” he said.

Small Power

Sometimes, democracy throws up some interesting anomalies.

For example, we generally assume that policies that come to the fore are those espoused by the majority party – who had the most backing for the electorate.

But take the current situation in Australia where the labour party only just retained power – by ‘dealing’ with a couple of independents and the Greens.

The dealing was around the ‘green’ agenda – Australia is likely to take a greener route than previously because that small band of people that were needed to secure power was able to do some tough negotiation on priority polices.