lightbulb“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its outputs per worker.”1

Productivity is seen to lie at the core of economies and critical to their progress. So it is essential to understand what productivity actually is.

What levers are there a Government can master and influence to increase the likelihood of sustainable productivity improvement? Productivity is very closely linked, and in fact is integral to, the whole innovation process within an organisation. This is the introductory post in a short series in which we will briefly explore some of the main themes in the subject of productivity.

Productivity means change and improvement. So at one level it is some form of organisation innovation in terms of work processes, job and organisation structures which shape the collective effort of the individuals employed2 (see post 1).

Overarching studies examining the skills which drive and shape productivity show that the broad graduate skills set and those held across intermediate (technician) roles are critical3. Today’s general increase in the number of graduates, though, does not necessarily lead to greater productivity, nor innovation. Just take the UK as a case in point where the cohort of graduates entering the labour market are not having the positive impact that you would expect i.e. generally bring new, better developed skills into the labour market. In fact, overall it is just the reverse, with those leaving the labour force on retirement taking more out of the labour market than are being added by new graduate entrants (see post 2).

A number of skills have been identified as being crucial to creativity and innovation and these can be profiled (range and extent of their development, exhibition and possession).  These are: creativity consciousness; levels of curiosity; pattern breaking skills; idea nurturing ability; willingness to experiment and take risks; courage and resilience levels; and, energetic persistence(see post 3)

A LLAKES study identifies 64 graduate occupations at the International Standard Classification of Occupations (ISCO) level which is 15% of all occupations within the ISCO system5. Structure and hence deployment of people within an organisation are critical, but so is the freedom to make improvements and use the capability of everyone in the workforce6. To structure an organisation-wide improvement, processes such as 6 Sigma, TQM, and TPM all formalise the process of work and task change at the individual level7. At the core of these processes is a transfer of work and tasks, and the development of ‘skills for improvement and change8. (see post 4)

We can also see from the study of tacit skills – skills learnt by doing, and by observing – that there is a growth of skills and knowledge which also raise the performance of work process and technology9. Socio-technical analysis researched and developed by the Tavistock Institute10 which brought with it the concept of minimal critical specification for organisation design and ensuring those managing a process can control of local variances11. (see post 5)

So, to fully understand productivity we need to look at the tasks people do at work individually and as groups and teams, and the flow people between jobs, occupations and sectors. Productivity is raised at work when people apply their full capabilities and when they move across the economy.

Notes:

  1. Krugman, P. (1994) The Age of Diminishing Expectations. US Economic Policy in the 1990s. MIT Press. 232 pages
  2. Toner, P. (2011) Workforce skills and innovation: an overview of major themes in the literature. OECD Directorate for Science, Technology and Industry (STI)/Centre for Educational Research and Innovation (CERI). OECD, Paris. 73 pages.
  3. Mason, G.; Rincon-Aznar, A. and Venturini, F. (2017) Which skills contribute most to absorptive capacity, innovation, and productivity performance? Evidence from the USA and Western Europe. LLAKES Research Report No 60, UCL Institute of Education. 63 pages
  4. Warner, J. (2004) Creativity and Innovation Effectiveness Profile. HRD Press, Amherst, Mass, USA. 16 pages
  5. Henseke, G. and Green, F. (2017) ‘Cross-National Development of “Graduate Jobs”: Analysis using a new indicator based on high skills use’ in S.W. Polachek, K. Pouliakas, G. Russo, and K. Tatsiramos (Eds) Skill Mismatch in Labour Markets (Research in Labour Economics, Volume 45). Emerald Publishing. Pages 41-79. The definition of graduate jobs used is a combination of degree essential, design essential (similar job), 3+ years’ experience required, high cognitive skills scale, high people skills scale, and, high autonomy scale.
  6. Eurofound (2015) Third European Company Survey – Workplace Innovation in European Companies. EU Luxembourg. 73 pages
  7. Shiba, S.; Graham, A. and Walden, D. (1993) A New American TQM. Four Practical Revolutions in Management. Productivity Press. 574 pages
  8. Warner (2004) op. cit.
  9. Goranzon, B. and Josefson, I. (eds) (1988) Knowledge, Skills and Artificial Intelligence. Springer-Verlag. 193 pages; Rosenberg, N. (1982) Inside of the black box: Technology and economics. Cambridge University Press. 304 pages
  10. Trist, E. (1981) The evolution of socio-technical systems. A conceptual framework and an action research programme. Ontario Quality of Working Life Centre, Issues in the Quality of Working Life. A series of occasional papers No 2. 67 pages
  11. Buchanan, D.A. and McCalman, J. (1989) High performance work design: The Digital experience. Routledge. 240 pages

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