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  • 22 Sep 2017 12:29 PM | John Heap (Administrator)

    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.

  • 15 Sep 2017 11:50 AM | John Heap (Administrator)

    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 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.

  • 08 Sep 2017 3:08 PM | John Heap (Administrator)

    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.

  • 01 Sep 2017 5:00 PM | John Heap (Administrator)

    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 would gain a significant productivity increase.

  • 25 Aug 2017 12:36 PM | John Heap (Administrator)

    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.

  • 18 Aug 2017 8:44 AM | John Heap (Administrator)

    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 counter-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.

  • 11 Aug 2017 1:18 PM | John Heap (Administrator)

    Over the last 50 years, there is no doubt that technology has made significant contributions to GDP and thus to national productivity. However most technology soon reduces in price and thus any contribution is soon lessened. Worse, we appear to be in a relative technology slump - there has been little true innovation in the last few years.

    So, technology is not going to come to our rescue. We have to take the 'low road' and pick up all the small productivity gains we can. We need a systematic, national productivity drive with government addressing policy and infrastructure and companies addressing skills and culture. We can create impact but it's not going to be easy.

  • 04 Aug 2017 10:43 AM | John Heap (Administrator)

    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. So, I make no apology for being rather UK-centric recently.

    In your organisation too, find ways of encouraging idea generation.  The more ideas you have to choose from - the more success is likely.  If you stop people thinking, you stop creativity and innovation.

  • 29 Jul 2017 10:59 AM | John Heap (Administrator)

    f your employees were fighting in factions, arguing among themselves and failing to do what you expect them to do, would you continue to pay them?  You might - but presumably you would also initiate disciplinary procedures to try to correct such behaviours.

    I suspect, though, that your answer to the question is that you would not tolerate it - or that it wouldn't happen in your well -run organisation.

    This is, however, what happens regularly, in politics. Both the US and the UK have exhibited such behaviours recently - infighting and squabbling between Republicans and Democrats - or Conservatives and Labourites.  All we, as the voting public, can do is to sit and watch - and perhaps seethe with anger - and wit until the next election.  These infighters and squabblers would not behave like this in the other compartments of their  life, surely.  But they seem to think this is how they are expected to behave as 'politicians'.

    There is an old adage - 'we get the politicians we deserve' - so it must be our fault.

    If we want productive government, we must demonstrate productive behaviours in all we do - and set these 'children' some role models.  We should also write to them and remind them of the constructive and productive behaviours we expect from our elected representatives - and we should certainly use our vote to sanction these unruly and unproductive behaviours whenever we get the chance.

  • 21 Jul 2017 11:25 AM | John Heap (Administrator)

    UK productivity in the first quarter of 2017 was the same as it was in 2007.  This  after relentless if sometimes slow growth over many years.So, not only have we not had the bounce i refereed to last week; we seem to have had a capsize and a sinking.

    Successive governments seem to be powerless to do anything about the problem but at leat this current government seem to have recognised the problem - and have set up a new UK Productivity Council to try to do something about it.

    Making up for10 years lost growth is probably impossible - but at least we could get growth moving again.

    W owe it to the next generation to give them some momentum to build on.

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