In 1940, one farmer supplied about 11 people with food for the year. Changes over time -especially in technology – mean that today the average farmer in the United States supplies 155 people with food for the year.
How many industries can match that kind of productivity growth?
But history is not important.
A more important question is …Where will the next phase of growth come from?
Has technology still got potential for us? Have new pesticides? Or doe we need new practices, new systems of crop growth.
We certainly need new ideas if we are to feed the growing global population.
‘Thingy’ is a word used in the UK by many people to represent something whose name they cannot recall – a ‘whatdyacallit’, a ‘thingymajig’. All cultures and languages have such words.
I use it here because it reminds me of the ‘next big thing’ (or should that be next big thingy)?
This – according to some – is the Internet of Things – the networking of physical objects.
Manifestations so far seem to be ‘home automation’ – devices that will change the colour of your lighting or switch on your kettle as you enter the house, or when you use your phone to direct it to.
So far, I have been underwhelmed. It seems remarkable how few of these things I want to do at all, let alone automatically or ‘more conveniently’. It might be ‘early days’ and in a few years I might be amazed at the possibilities but, for now, you can keep these thingies that are so clever – I’ll work with my old technology for now.
Has the open plan office had its day?
When they were first introduced, they were seen as being facilitators of communication, interaction and cooperation – bringing disparate groups together.
Now when I see them I think of them as being facilitators of noise and distraction.
It was always the case anyway that some employees found them uncomfortable – exposing and intimidating.
Ia m not saying that they cannot work – only that they should be chosen for those situations where they CAN work – and rejected for situations where they are distractors.
We need more hybrid offices where those that need them can work in private spaces – after all there are other technical means now of improving communication and interaction …. the office design does not have to do that.
Fairly recently, the UK government issued a draft Industrial Strategy. Any discussion on this seems to have been drowned out by the Brexit rhetoric. Yet it is too important to ignore. UK productivity is low – wages are low – living standards are low. We need a kick up the backside, to shock us into action … or we need a sensible, long-term strategy.
Instead what we get is Brexit posturing – and all the media attention is fixed on that (and Trump, of course).
When I advise companies, I tell them to beware of concentrating on the urgent at the risk of ignoring the important. Well, productivity improvement is both urgent and important – it is the only way out of the low wage, low living standards cycle.
Put the industrial strategy back on the table, please.
Last week we talked about productivity levels – and the conundrum about unemployment and wage levels.
I suggested, as I have done several times lately, that we might need to reconsider how we measure productivity – since the measure used to compare nations uses labour productivity.
But the growth of robots and other automation devices has distorted this figure. The cost of the robots is not part of labour cost – and their g=hours are not part of labour hours.
So, nations that have automated the most lose in the productivity figures. This does not seem right.
This investment goes unrewarded and we are no longer comparing like with like.
Most of the old economic certainties have gone.
For many years, the ‘rule’ was the as unemployment levels dropped, wages would rise (to entice workers away from others to your organisation). Since the great 2008 financial crisis, this has not proved true. Unemployment has dropped to the point where the UK is close to full employment – but wages have not risen correspondingly (though they have risen).
This position is mirrored throughout the developed world.
The experts don’t seem to know why this is so or whether this is a temporary phenomenon.
We seem to be in a position where all we can do is ‘watch this space’, ‘wait and see’.
Or, as I have been suggesting in this blog lately, do we need to change the way in which we measure productivity – to reflect the changed nature of industry.
The UK government recently established the Productivity Leadership Group (PLG) to try and boost the nation’s productivity.
The PLG says that if all except our most competitive businesses were able to improve their productivity to match the companies ranked 10 per cent above them, an additional £130bn Gross Value Added (GVA) would be unlocked every year – certainly a boost to business confidence and national productivity.
The power of benchmarking of this kind is that when organisations see that others (and especially others in the same sector) are already achieving such results, it shows the ‘art of the possible’. “If they can do it, we can too.”
This is why we always suggest that governments should carry out sector benchmarking – and show organisations what is achievable – preferably against a number of productivity variables…. so that any one organisation might find its performs well against some of these variables but poorly against others. If it could raise performance to be among the top performers against all variables, it gains a significant productivity increase.
The US has created lots of jobs since President Tump was elected. I am sure he will take the credit – and bask in the reflected glory.
President Trump should be careful, though. America’s productivity is not rising. Any wage rises will be at the expense of inflation. In a year’s time, we may have a better guide to the success of his policies – for now, those in work will be pleased… but may find their wage being eroded.
Short-term gains are often illusory.
France takes the summer off. many factories close down for a month while workers holiday en masse.
Other European countries also take longer holidays than the UK.
Yet the productivity of these countries is higher.
Can anyone explain this – it is intuitive.
I have voiced my doubts about the way we measure national productivity before.
Each time I note something like this, i become more convinced that we need to take a fresh look at what we measure and compare.
A few of my recent posts have related to U K productivity and challenges. This is not because the UK faces more challenges than anyone else (though Brexit is causing some fears).
The UK is going through a ‘bad patch’ but is at least trying to do something about it with new committees and task forces being established.
Will they work?
I doubt it – but they might at least spark a discussion and debate which might release some fresh thinking
So I am relatively optimistic. I hope you are too - for your country.
Help generate discussion – that generates ideas. We need ideas – lots of them. And we need to share them
And whether they relate to the UK – or somewhere else is irrelevant. good ideas are good ideas wherever they originate.
In your organisation too, find ways of encouraging idea generation. The more ides you have to choose from – the more success is likely. If you stop people thinking, you stop creativity and innovation.