Saturday, 25 June 2011

Organic farming holds back productivity growth

Brett Stuart, a partner in analytics firm Global AgriTrends suggests that agricultural productivity is being impeded by the minority demand for organic or "natural" production systems.

This is an interesting debate.

Organic produce commands a higher price - so value added per area rises ... so, in one sense, productivity can be said to rise.

However, that doesn't help feed a growing population. For that we need higher 'physical' productivity.

So, is Brett right. If you want to comment, head over tho the Productivity Futures group on LinkedIn and join the discussion.

Saturday, 18 June 2011

USA clean, China dirty. right?

We all know that the Chinese are massive polluters, don't we?

(Some of us even sympathise knowing that China is playing economic 'catch-up' with the West ... when the Chinese have the same standard of living as Americans, then we can complain.)

Well, things are changing. In 2004 the U.S. was the focus of approximately 20% of total global clean energy investment and China accounted for just 3%.

By 2010, China saw 20% of that investment and the U.S. 19%.

So, China might be dirtier ... but it looks like it is trying to clean up its act.

Saturday, 11 June 2011

Do not believe all that you read

Chicago economist William Strauss explains how rising worker productivity has led to the situation where manufacturing occupies much less of GDP than it once did.

"In 1950, the manufacturing share of the U.S. economy amounted to 27% of nominal GDP, but by 2007 it had fallen to 12.1%. The greater efficiency of the manufacturing sector afforded either a slower price increase or an outright decline in the prices of this sector’s goods. As one example, inflation (as measured by the Consumer Price Index) averaged 3.7% between 1980 and 2009, while at the same time the rise in prices for new vehicles averaged 1.7%. So while the number (and quality) of manufactured goods had been rising over time, their relative value compared with the output of other sectors did not keep pace. This allowed manufactured goods to be less costly to consumers and led to the manufacturing sector’s declining share of GDP."

Some go on to suggest that this rise in productivity also cost jobs ... but efficient productivity (as we see above) results in lower prices for goods ... which means that more people can afford them .. which changes the size of the market... which creates jobs.

I am not saying that there is not a link ... just that the link is complex and multi-dimensional

Don't believe all the blogs you read ! (Only this one of course)

Saturday, 4 June 2011

Innovation Areas

It is obvious that some technologies lend themselves to, and lead to, innovation. Electronics, for example, has seen massive changes over the last couple of decades ... there are so many products available now that were not even conceived 20 years ago.

Yet, in many other areas the pace of change is astonishingly slow.

About 50 years ago, the internal combustion engine (ICE) and auto design led to fuel efficiencies of about 40 miles per gallon. Since then we have made improvements ... but incremental and evolutionary ... most cars are still in that 40 mpg ballpark.

Is this lack of innovation and change due to the existing technology being so good ... or a lack of enthusiasm by the manufacturers/designers ... or the fact that fuel has been relatively cheap and thus there has been little pressure from consumers for greater efficiencies.

Probably all of these have had an effect.

It will be interesting to see how the changing pressures and priorities (which themselves change the political and economic dynamics) will affect the rate of development of better ICEs ... or better alternatives with the current development of electric and hybrid vehicles.

I don't want to get drawn into the debate about 'better' (well not in this post at least)... here I am only interested in the development of more mpg (or some equivalent measure).

Let the innovation begin.