Productivity for our future

Management Services, Autumn 2006 by Hubert, Tony

Productivity has had a topsy-turvy past: no matter how indispensable, it has been more often feared than loved by the bulk of the workforce. However, it has always bobbed up again as the means for ensuring that an economy survives and thrives.

As a broad concept of continuously striving to make the best possible use of available resources to achieve societally desirable ends, the policy significance of productivity in the future can only be on the ascendant if Europe is - as the 2000 European Union Lisbon summit declared - to be the world's most competitive economy by 2010. Alas, this is an impossible goal since America's supremacy over Europe, east or west, has remained very constant over the whole of the past century. But countries, companies and individuals must and will continue to strive to catch up with and outdo the performance of their competitors. For competition - not governmental fiat or money - drives innovation (cf. the EANPC's 2006 revised Memorandum on Productivity), which to be sustainable in turn needs to be underpinned by the appropriate attitudes, skills and knowledge of the country's and company's stakeholders. And the struggle to ensure positive attitudes is never-ending. The combination of such attitudes with changing skills and knowledge is what the Memorandum terms 'productivity development'. National values and cultures enhance or impede productivity development, as is indicated by 'national histories' of individual European countries.

However, if the continuing significance of 'productivity development' is beyond reasonable doubt (though continuously contested by powerful national and international lobbies), the institutions created and sustained by society to strive for it change over time. Thus, as the six decades since the founding of the original Anglo-American Productivity missions in 1946 demonstrate, productivity centres per se are not immortal - far from it. Nor even is their original concept: a jointly (employer-trade union) directed, government-supported independent body having as its mission to promote smooth socio-economic change by not-for-profit training, consulting, research and information activities. As European governments' support (national and local) has waned - due in no small part to the continuing pressure to reduce public spending - so too has the interest of the centre's constituents and clients in the concept of a centre, physical or even virtual. Indeed, centres have increasingly had to practice what they preach: competition is the mother of innovation.

Labour productivity

But competition does not preclude the establishment - usually limited in time - of review bodies, programmes and perhaps even organisations, albeit often virtual, entrusted with boosting awareness of the importance of 'productivity development'. These are currently spread across Europe from Finland to Portugal. In between, where centres have died, there are some signs that there is a resurgent awareness of the significance of productivity - in particular 'labour productivity' - and ideas discussed on how it can be improved. This is the case notably in The Netherlands. As the US Bureau of Labour Statistics, the worldwide Mecca of dependable figures on productivity, never fails to underline, 'labour productivity' is an excellent indicator of relative performance, although 'labour' as such is only one of its causes.

So 'awareness' of the importance of productivity needs constant reiteration. Awareness, however, should not be misunderstood as 'promotion'. Long gone are the days of 'productivity movements' exhorting, for instance, Irish target groups to get a MOVE on (make ourselves very efficient) or Koreans to double their productivity over five years or in other ways trying to popularise what will always remain a somewhat vague and threatening notion. Awareness means rather both drawing attention to the concept and indicating what it means in specific circumstances. For instance a recent TNO Bouw report to the Dutch parliament analysed the weaknesses of the Dutch building industry: Nine billion could be saved annually if those commissioning public works would use more efficient and effective approaches by co-operating more closely with building companies. The report's author concluded that the relationship between the two parties could not be worse than it is now and trust needs to be built up. And this in one of the world's richest and most consensual countries.

Closer co-operation and trust between contracting parties was not the only approach developed during the 20th century for raising productivity. Techniques are also important, ranging from Fordism and Taylorism (still widely prized and used even in the 'high north', albeit with a 'human face'), through motivation boosters to high tech and high touch and benchmarking - the more recent version of productivity measurements and comparisons. All such techniques and approaches have described, if not prescribed, how certain tasks can be efficiently performed - after all, new learning takes place by standing on the shoulders of past giants. New approaches and techniques always seek to replace labour by capital: machines and tools eliminate not just past crafts but, more importantly, the more menial (physical and mental) tasks of men and women, albeit with productivity increasingly dependent on humans' higher capacities.