Return to Productivity

Why important for organisations

  • Productivity improvement has had an enormous impact on most people’s lives, at least in the G7 nations – office workers and carpenters, teachers and taxi drivers, all earn on average so much more than they do in India or Africa, say
  •  In the middle of last century, over 40% of G7 family expenditure went on food and clothes – today, it’s only 10 to 15% for such basics – productivity thus also increases disposable incomes to buy non-basic things – stuff one would ‘like-to-have on top of  ‘must-have’



  • Manufacturing has had spectacular success in reducing unit costs and so prices of most household items whilst greatly improving quality and service levels offered  – and watch container ships at any port, each one carrying over 15,000 containers, equivalent to over 1,000 small freighters in the olden days


  • In private sector services, similar successes include expensive time-consuming typesetting at printers has been replaced by computer technology in the last 30, the telecommunications sector has transformed people’s access to information, music and each other in the last 20 years and supermarkets now offer far more at better prices, quality and convenience than their ‘high street’ competitors ever did


  • Sadly, the same does not appear to be happening in the public sectors – they lack any significant competitive pressure to increase their productivity and get their costs down – for example, in the UK alone, the general view is that:
    • The police are considered to be “poor at dealing with crime”
    • Local governments “vary widely in their performance levels” – many are thus not serving their local public well
    • Passports from the Home Office can take far too long to renew
    • Taxation errors by HMRC run into millions




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