by David Choat (Director, Policy Progress)
We all know that New Zealand could do better and be more effective in its economic performance. But when we discuss solutions, too often we gravitate to ‘big-picture’ macroeconomic ‘fixes’, which may (savings rates) or may not (tax cuts) have anything to do with the problem at hand. Owen Harvey doesn’t. His has been a consistent voice, urging to us to look at and think carefully about what happens within the workplace – and what we can do to improve that. Owen brings together the best and most progressive work in the ‘management’ literature with an appreciation of public policy settings and the contribution they can make. This short pamphlet provides a useful introduction to his ideas and their implications, which extend to achieving a more environmentally sustainable way of working.
The case for the “workplace” as a locus for productivity improvement Almost all of what constitutes national “debate” about how to lift New Zealand’s productivity, and characterises our various attempts to improve it, focuses on macrolevel inputs such as capital investment, new technology, and skill development. These inputs, together with our obsession with removing regulatory impediments (ala the Brash Productivity Report), have historically constituted the sum total of our national strategies to improve our productivity performance, and as the “headbanging” metaphor goes: “if you always do what you have always done, you will always get what you always got.” This remains true for previous governments of every hue, apart from some small investment in workplace productivity initiatives by the last Labour Government. Even when researchers and commentators, such as the New Zealand Institute, pinpoint labour productivity as an issue, they add a few more intangibles to the list, but essentially still come up with the need for greater microlevel investments in these same inputs:
“lifting labour productivity depends on improving the drivers of labour productivity; entrepreneurship, innovation, skills and talent, investment and national resources.1
To be sure, available skills, capital deepening and so on, have a significant effect on labour productivity (New Zealand has amongst the lowest levels of technology intensity per worker in the OECD - about 32nd out of 37 according to a 2002 UNIDO report). However, it is in the arena of multi-factor productivity where potentially the greatest long term gains can be made. This is because virtually all OECD countries are following a similar macro and input-led policy pathway to improving national productivity as New Zealand, which means we are unlikely to gain any particular advantage (in fact low capital and technology investment levels means we will probably continue to go backwards following this strategy alone).
New Zealand Institute, A goal is not a strategy: Focusing efforts to improve
New Zealand productivity, August 2010, p. 2,
What always seems to elude policy makers and commentators alike is the fact that it is in the workplace
where all these inputs come together – more or less
effectively. What happens in the “black box” of the organisation hugely determines multi-factor productivity outcomes, and is therefore well worth paying attention to. What does happen there is of course hugely complex and challenging which in itself is sufficiently scary for policy-makers to steer away from with rationalizations such as, “what happens inside the firm is the business of
the owner” (apart from employment and health & safety
legislation of course). So what happens or doesn’t happen inside the firm is largely regarded as the province of management, or the owners (which cuts to our Anglo-Saxon deification of property rights, but...