Analysis and Commentary

How can we refrom the PC when we can no longer even track productivity – by John Sheridan

Analysis and Commentary

The federal treasurer Jim Chalmers has given the new chair of the Productivity Commission Chris Barrett an impossible job, argues John Sheridan. If we can no longer measure productivity in a digital age – and we can’t – how can any amount of reform of the PC help boost national productivity?

Workplace productivity comparisons mean little or nothing in the 21st century.

You only need to go and look at how they are calculated to wonder what world these guys are living in.

EIt is a bit like the Emperors new clothes – they are wearing no credibility at all.

Multifactor productivity is defined as a measure of output to a combined input of labour and capital.

This is impossible to measure in the midst of a digital revolution where ‘labour’ is no longer easy to define, so they don’t bother.

The contribution of software to productivity is huge – it comes from multiple sources within and beyond a country’s borders. How do you measure the contribution of a robot working with a person?

And which industries are considered productive industries anyway?

How do you increase the productivity of a nurse or a fireperson or a police person? Or a soldier? Or a politician?

We have lost the plot on what productivity actually is.

And most industry sectors are not productive industry sectors anyway.

How do you measure the productivity of a retail worker standing in a shop waiting for a customer, moving items around to look busy?

Let’s leave the 19th century behind and start rethinking what productivity actually means in the digitally driven 21st century.

Then it might make sense to ‘refrom’ the Productivity Commission.

After twenty years in advertising as a creative director working for multinationals in three countries, John Sheridan co-founded Digital Business insights to help organisations leverage the benefits of the new digital economy. He is the co-creator of the RED Toolbox, an innovation platform for Australia’s productive industry sectors.

Picture: Treasurer Jim Chalmers

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