Productivity Frontiers: Enhance labour productivity significantly at firm level


National Productivity Commission demands wider engagement of the stakeholders at the firm level to significantly raise Australia’s productivity, especially the labour productivity.

Image courtesy of -Marcus- /
Image courtesy of -Marcus- /

Peter Harris, Chairman of the Productivity Commission was emphasising in his paper presented to the Trans-Tasman Business Circle engagement at Perth. The need for firm level enhancement of productivity of labour and capital is prime driver to balance the economy.


The primary factors contributing to our Gross National Income growth, Mr Harris said, “ productivity, labour force and the terms of trade. Or how we work; how many of us work; and how much foreigners are prepared to pay for what we produce versus what they sell to us.”
According to the Productivity Commission chairman, “Demography is getting to us – we’re getting older, as a nation. This will mean lower labour utilisation, is now not adding to growth but detracting from it. The proportion of us working will fall from now on, probably for several decades. There’s possibly a bit we can do to slow this down but as you can see, it’s not likely to be a big influence on national income anyway.”
He continued, “ the terms of trade will decline. It’s also not really a choice. The decline has already started. And it too is also not an area amenable to government policy initiatives. And this leaves us with productivity as a positive influence”. Mr Harris emphasised, “And only productivity.”

The task for bringing balance to the economy , by enhancing productivity is by increasing the productivity at the firm level and at the workplace level, both private and public sector , both resource and non-resource sector, both service and manufacturing sector. A culture of productivity has to be the wave on which the people should surf themselves. The counter current and gravity is enormous, as our productivity slack will drag us down, firm by firm.

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