News

Citation

Heap, J. (2014), "News", International Journal of Productivity and Performance Management, Vol. 63 No. 7. https://doi.org/10.1108/IJPPM-07-2014-0105

News

Article Type: News From: International Journal of Productivity and Performance Management, Volume 63, Issue 7

Beware the figures

We all know that statistics can lie … but we also know they are useful sources of information and stimulus for discussion and debate. The difficulties with taking them “without question” were highlighted recently in Australia.

According to figures in a speech by Reserve Bank governor Glenn Stevens recently, labour productivity in all industries improved at an annual trend rate of 2.1 per cent over the 14 years to the end of 2004, but then slumped to an annual rate of just 0.9 per cent over the six years to 2010.

This is what had big business fomenting over the productivity crisis. Spurred on by the press, chief executives queued to attribute the crisis to the Labour Government's “reregulation” of the labour market, its failure to cut the rate of company tax, plus anything else they didn’t approve of.

Except that, according to the Reserve Bank's subsequent work, labour productivity improved at the annual rate of 2 per cent over the three years to the end of 2013.

So was there (is there?) a crisis? Those of us long in the tooth who have seen this kind of thing before, suspected that much of the apparent weakness in productivity was explained by temporary factors such as, in the utilities industry, all those desalination plants built and then mothballed and, more significantly, all the labour going into building all those new mines and gas facilities.

Then, of course, all these things came on line – and output went up.

It shows we need to take longer-term view of productivity … it is a long-term phenomenon. It can change quickly in a plant – and occasionally in a sector – but rarely across a whole economy. Just wait and see!

Scotland – brave but not productive

Productivity in Scotland's private sector has lagged behind that of the rest of the UK by 11 per cent on average since the late 1990s, according to a paper from academics at the Durham University Business School. The gap is largely explained by an underperforming services sector, the paper said. The paper examined total factor productivity. Official data suggested that labour productivity shows a much smaller gap.

By the time this issues of IJPPM goes to print, you will know the result of the referendum on Scottish independence – and Scotland will start to know the size of its productivity problem.

Australia helps out

A new five-year 7.3 million Australian dollars (40.5 crore rupees) regional research initiative in Nepal, Bangladesh and India will tap the agricultural potential of the area, and help 7,000 farmers to become more productive, profitable and sustainable through adopting new technology.

The programme will operate in two districts in both Bihar and West Bengal, as well as two districts each in Bangladesh and Nepal. It was launched in Kathmandu in July.

“This initiative will help to raise agricultural productivity in a region which has the potential to become one of Asia's great food bowls”, said the Acting Australian High Commissioner to India, Bernard Philip.

The eastern Gangetic plains are dominated by small farms with many female farmers who have little access to credit, quality seeds, fertilizers, irrigation or formal extension services. They also have to contend with climate-related risks and extreme events such as floods, drought and cold snaps.

“This program will allow farmers to test a range of innovations to help them boost food production, including conservation agriculture and efficient use of water resources, while strengthening their ability to adapt and link to markets and support services”, Philip said.

“Our aim is to enable at least 130,000 farmers to adopt these technologies within the next ten years”, Philip added.

Productivity creates interest

The only way to move from current low interest rates is to reinvigorate productivity in the euro zone, with states continuing reforms and budget consolidation, European Central Bank (ECB) Executive Board member Benoit Coeure said recently.

Speaking after the ECB earlier left rates at record lows, Coeure said governments should not view the current period of low rates and favourable market sentiment as “an invitation to abandon the path of fiscal prudence”. Rather, they should “accelerate reforms aimed at freeing up growth opportunities”.

Malaysia needs more growth

Malaysia needs to make every effort to maintain the current healthy growth rates and possibly push them higher to ensure the government's ambitious targets for Vision 2020 can be met, a United Nations (UN) official said.

The UN's System's Operational Activities for Development in Malaysia Resident Coordinator, Michelle Gyles-McDonnough, said that several measures could be taken to boost productivity and growth.

Among initiatives that Malaysia could take in aiming for higher growth include undertaking more developmental mega projects, a move that would not only push growth but indirectly drive labour productivity, Gyles-McDonnough said at a media briefing after the launch of the post-2015 Development Agenda National Consultation here.

She cited the multi-billion ringgit Mass Rapid Transit (MRT) project from Sungai Buloh to Kajang as among such development projects that could drive innovation, bolster economic activity and accelerate gross domestic product (GDP).

Under Vision 2020, Malaysia needs to register an average GDP of 7.0 per cent per annum leading in the years leading to 2020. Malaysia's first quarter GDP this year was at 6.2 per cent.

John Heap