Why productivity growth is positive and necessary
Productivity growth represents a vital source of improving our material standard of living. Higher productivity equals increased income levels which, in turn, generate employment and enable us to spend more time doing things that we enjoy. Productivity is highly topical as new data comes to light that productivity performance is worsening, posing a challenge for Australasian countries.
In today’s competitive global market, productivity growth is necessary and inevitable if we are to sustain and improve our material standard of living. Despite this, Australia has experienced falling levels of multifactor productivity and our productivity lags behind that of other leading OECD countries in the areas of manufacturing, wholesale trade, retail trade, utilities, communications and finance. It is vital that industry leaders in Australia and New Zealand continue to engage with one another about how we can strengthen our productivity performance.
Fundamentally, productivity improves when we work smarter, not longer. If we can reduce the time it takes to complete our tasks from 8 hours to 6 hours a day, we have generated an extra 2 hours to invest in new business; to improve existing offers, purchase new technology and even create new products and services. By challenging the way we carry out business and by doing things differently and being open to positive change, we can experience new levels of prosperity, fulfilment and growth as individuals, as a business and as a nation.
This paper puts forward the merits of productivity growth in Australasia and why this issue must be addressed.