News

Citation

Heap, J. (2015), "News", International Journal of Productivity and Performance Management, Vol. 64 No. 7. https://doi.org/10.1108/IJPPM-07-2015-0102

News

Article Type: News From: International Journal of Productivity and Performance Management, Volume 64, Issue 7.

We are not diffusing fast enough

We haven’t stopped having good ideas, but those we do have aren’t spreading as quickly as they once did.

So argues the Organization for Economic Cooperation and Development in its latest attempt to explain the slow growth of productivity in the years leading up to and following the financial crisis. Its suggested remedy is an intensification of global competition among businesses that will cull the old and the weak, and allow newer, more dynamic rivals to thrive and grow.

In the study, the Paris-based research body found that productivity growth had slowed across developed economies during the from 2000 to 2013, and across China and India during the years from 2007 to 2013. That matters because over the longer term, people can only earn more if they get better at producing goods and services.

The slowing of productivity growth has puzzled economists, who have offered a variety of explanations. Some of those involve a slowing in the pace of productivity enhancing innovations: smartphones and music streaming services may help stave off boredom, but they’re not exactly in same league as the internal combustion engine when it comes to changing the way we work. That reflects a wider disenchantment with the progress of science and technology. Where are the flying cars we were promised? The hover boards? The vacations in space?

But digging into the data, the OECD’s economists conclude that businesses are still innovating in ways that increase their productivity. In manufacturing, the 100 most productive firms in each sector saw output per worker increase at an annual rate of 3.5 per cent between 2001 and 2009, compared to just 0.5 per cent for other firms. In services, the gaps are even wider. “Frontier” producers boosted worker productivity by 5 per cent each year, compared with 0.3 per cent among other firms. In both manufacturing and services, the gap between the most productive firms and the rest widened towards the end of the period, in the year immediately after the financial crisis hit.

“The main source of the productivity slowdown is not so much a slowing of innovation by the most globally advanced firms, but rather a slowing of the pace at which innovations spread out throughout the economy–a breakdown of the diffusion machine”, the OECD said.

A workout increases your productivity

New research out of the University of Otago suggests regular workouts may help keep you more productive, when it comes to day-to-day tasks.

The findings, published in the Public Library of Science journal PLOS ONE, are based on experiments by the University’s Department of Psychology that have shown that, at least for laboratory rats, a once-daily exercise session is sufficient to increase productivity throughout the day.

Lead researcher Kristin Hillman, M.D., said the rodents who exercised 20 minutes a day had better “problem-solving, persistence, and strategy execution” skills than those who did not exercise.

“We all know exercise is good for our physical and mental health, but this data suggests that regular exercise may also help make you more productive when it comes to getting tasks accomplished each day”, Dr Hillman said.

Who chops your lemons?

They say the best ideas are the simplest ones. At Pizza Express, the restaurant chain, it was all about the lemons. Who should chop them?

It used to be the waiter’s job, the first thing he or she did when they arrived for work in the morning.

That way all the lemons were sliced and ready to drop into orders of water or cola for the rest of the day.

But then one of the pizza chefs said it just didn’t make any sense. The chefs spent all morning chopping and dicing the toppings for pizzas.

Waiters, by contrast, had to take a break from their usual tasks, wash their hands, clear a space and then clean up after themselves.

So it was decided – henceforth, across Pizza Express’ almost 500 outlets globally, chefs would be in charge of lemons.

“Just by changing who chops the lemons, we were able to make a significant saving in hours which translates into a significant financial saving”, says Richard Hodgson, Pizza Express’ chief executive.

Tasmania’s growing confidence

Tasmania is defying a national trend of declining agricultural productivity and is outstripping world growth.

A Tasmanian Government “food and beverage scorecard” published this week said the state’s year-on-year real growth rate rose to 3.7 per cent in 2012-2013.

That is twice the world average of 1.7 per cent and almost triple the Australian agricultural productivity growth rate of 1.4 per cent calculated by Rabobank for the decade between 2002 and 2011.

Tasmanian Agriculture Minister, Jeremy Rockliff, said for the first time in the history of the scorecards, farming and agribusiness matched aquaculture’s strong growth in Tasmania.

He said Tasmanian was now on track to lift the value of its agriculture tenfold by 2050.

Union membership boosts productivity

In a recent letter to the Chancellor, UNITE, the union, pointed out that Britain’s best-performing sectors on productivity include car manufacturing, aerospace and other engineering sectors which have a very high level of union density, and where trade union involvement has been central to the improvements secured.

When the government praises the success of the UK motor industry, for example, it should not forget the contribution of Unite representatives.

Recent analysis by the National Institute of Economic and Social Research finds evidence that “unionisation may be beneficial to workplaces seeking to improve their performance after the recession […] counter to the proposition that firms benefit from a highly deregulated and non-unionised environment”.