Productivity is the only game in town!
Ian Walsh, Partner, Argon & Co It is great to see that finally we are talking as a nation about the need to be more productive. Our poor performance in productivity terms is not a new issue or problem, but given the current economic environment, it has become clear to everyone that we have a significant gap to countries with which we compare ourselves. The consequences of this are significant, with many young New Zealanders leaving for foreign shores for better pay, conditions and quality of life. This problem has been disguised for decades by global financial crises, pandemics, earthquakes and media misdirection (“We are the most liveable country!”, “Auckland is one of the top 10 cities!” etc.). Like climate change it has been possible to ignore for a long time. However, most of us are aware that our infrastructure is creaking. We can’t invest in health education, police, transport and other programs to the extent that we would like to, as we can’t afford it. Productivity is essential for economic growth, competitiveness, profitability, job creation, resource efficiency, and work-life balance. Focusing on productivity improvements at individual, organizational, and national levels can lead to numerous benefits and contribute to overall prosperity I have been to many business meetings, and the focus for any improvement drive is return on investment – they are asking whether investing in an activity makes the business more profitable, more competitive and ultimately whether it will result in better return for shareholders, so they can invest in future programs to improve the product or service, grow the business and offer better products or services. The same is true at a national level, the government can only spend what the economy generates (balanced budgets and low debt). Profit (or in more political termianology, surplus) needs to be […]