Work smarter, not harder
In short, productivity is the amount of the in and output per unit. Productivity growth is essential to maintaining, or increasing, our standard of living. The biggest problem is the lack of labour force growth in Canada and the fact that business innovation in Canada lags behind other highly developed countries.
There are different growth trends for the specific components of labour productivity growth.
* Capital deepening: Capital deepening is an increase in capital intensity, normally in a macro context where it is measured by something analogous to the capital stock available per labor hour spent. In a micro context, it could mean the amount of capital available for a worker to use, but this use is rare.
* Labour composition: skills and knowledge of the workforce
* Multi-factor productivity: Multifactor productivity relates output to a combination of inputs used in the production of that output, such as labor and capital or capital, labor, energy, materials, and purchased business services (KLEMS).
At capital deepening and labour composition has Canada a better score than the US has, but there is a big difference between the two countries in terms of the third factor, multi-factor productivity (MFP) or also called like innovation. Canada had zero growth in MFP over the 32-year period covered by Statistics Canada.
The productivity fell form 90 percent to 87 percent from 1984 to 2007. There was no growth between 2005 and 2009 and only some largely cyclical and stimulus driven company’s growth like 0,4 percent in 2011. And also the companies losing ground to the major competitors. Increased productivity is critical for economic growth. The Canadian productivity became much compared to the productivity of the US. But the biggest problem is that Canada continues to lack an overarching productivity strategy.
Innovation is the ability to create new products or markets. It’s the key source of productivity gains and...