Thursday, November 17, 2011

1.4% versus 2.2% anually adds up

 The Conference Board or Canada lays it out pretty clearly, Canada is getting left behind when it comes to improving productivity.
Ottawa-based research firm used a simulation boosting Canadian labour productivity growth by 0.8% per year higher from 1988 to 2008, the same increase as the difference between annual labour productivity growth in the US (2.2%) and Canada (1.4%) over the 20-year period.  The Conference Board notes that since the 1980s, Canada’s performance has been sluggish in multi-factor productivity (or innovation) and capital intensity, while labour quality has been relatively stable.  Previous Conference Board research found that Canada’s relatively well-educated workforce does not have the physical capital required to maximize productivity performance. 
What to do about it?  The report blames "physical capital", they mean equipment, machinery, computers, software and the like.  This is part of the answer, but is not the right answer.  Here in Canada and especially in Alberta productivity is not talked about enough. And when it is talked about there is not enough understanding about what it means and what to do about it.
I come from the UK, Lean manufacturing awareness is so much deeper than here in Canada.  Most regional colleges do a basic diploma in 5S and lean.  To quantify the difference, if you Google 5S training, Google Canada gives 54,000 results while Google UK gives 471,000 results.  A difference of 10:1 for a population difference of 2:1.  We simply do not have the awareness in Canada especially here in Western Canada about what drives productivity and what can be done about it.  Alberta Productivity is doing a great job of raising awareness.  Sadly if reports like this continue to come out and point the finger in the wrong direction it will only reinforce current misunderstanding and the opportunities that Lean offer companies will continue to be missed.

To read the report in its completeness, Canada’s Lagging Productivity: What If We Had Matched the U.S. Performance.

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