Does Productivity Matter?

The obvious answer to the question does productivity matter is yes, of course, but the obvious is nearly always dangerous. Let’s have a look at does productivity matter and if so, why?

Measuring productivity is not easy because first you have to define it. Even the Office For National Statistics is confused and talks about output per hour, output per job and output per worker. Once we have selected one of these we then need to define output – should we use sales value, profit, contribution, or what? Then what about per hour? Should we include travel and other “non productive” time? What Constitutes Work?

Here’s a thought. Van Gough painted around 1,000 pieces of art during his lifetime but only sold a few of them and those he did sell were sold for very little and yet in 2021 one of his paintings sold for $71 million. On the other hand there are factories churning out large quantities of paintings for a mass market which, if we use output per person or per hour make them far more productive than Van Gough  but which would you rather have, a country full of Van Goughs or a country full of factories productively churning out paintings that are all the same?

An extreme example I know but it’s the extremes that tend to prove the point.

Many of the things that lead to an effective way of life and society such as happiness, lack of stress, contentment, health cannot be measured by simple productivity measures. Under certain circumstances productivity in terms of efficient output is very important and a fine judge of success or failure but we should not just judge a business, individual, economy or country just by this simple and crude measure.

You may well have a job or business where the comparison of your productivity with others is meaningful l but this won’t be true for every case. A simple demand for constant increases in productivity can often really be a demand to race to the bottom and in a world where we are looking at sustainability that may not be the good thing it was once seen to be.

Does productivity matter? Yes. Should we look at productivity in isolation as a measure of effectiveness? No.

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