Ka tangi te tītī
Ka tangi te kākā
Ka tangi hoki ahau
Tihei Mauri Ora
For someone who openly admits to a love of cricket and of numbers (and, yes, there is a correlation), a document titled Productivity by the numbers puts me very much in my happy place.
Just like in cricket, the numbers are but a taster or teaser of the action to be uncovered. Uncovering the range of influences on the numbers – interrogating what drives them, and beyond – advances us to a happy place where understanding and insight abounds.
In cricket, there are a range of tactics and strategies available to teams from which a potentially winning combination needs to be chosen as part of an overall gameplan. Likewise, there are a range of perspectives on productivity: what is productivity and how can it be improved, what is the aim, is there a pay off – and, for some, why bother?
Clearly and unambiguously, improved productivity is about reaping more for less. But this is where the clarity ends and the ambiguity begins. Differing perspectives revolve about answering the question: more of what? And, conversely: less of what?
The conventional view responds with more outputs – more goods produced and more services delivered. These “more goods and services” need to be delivered using fewer productive factor inputs – (for example, land, people-hours, raw materials, machinery and equipment). More material outputs for fewer resource inputs is consistent with the view that the provision of such goods and services drives material incomes and better living standards.
This is the perspective of productivity that is the subject of interrogation in this document – partly because we have reasonably good numbers to support such an interrogation, and partly because it is the perspective that we most understand. That said, we do not overlook or ignore other aspects of productivity and the determinants for its improvement.
He Ara Waiora and Treasury’s Living Standards Framework capture elements of broader perspectives. As depicted in the Living Standards Framework, strong institutions and governance (for example, in firms, markets and civil society) contribute to living standards, alongside wealth reflected in social cohesion embraced by culture. The realms of te taiao, ira tangata, and wairua (the natural, human, and spiritual worlds), as depicted in He Ara Waiora, also contribute to a broader view of productivity and wellbeing, alongside a range of values like kaitiakitanga and manaakitanga.
So, alongside more outputs, improved productivity needs to encompass other non-material elements. For example, we strive for more family time and leisure hours, a sense of better community connection and cohesion, opportunities to feed both the mind and the body, and we strive to strengthen the foundation and legacy our descendants will inherit. The health of the spiritual world also features highly in the basket of needs that influence the desire to reap more.
As for the “less” side of the equation, in addition to fewer productive factor inputs, improved productivity would require fewer potentially harmful activities, such as culturally unacceptable behaviours, or the promotion of addictive substances and gambling attractions, or production that causes ecological degradation and depletion.
Acknowledging these broader elements reinforces that any discussion of productivity (and, yes, the numbers) should focus on adding to the understanding of, and insights into, the influences driving productivity and their impact on wellbeing. Sadly, as this document reflects, the insights provided by the interrogation of the numbers highlight challenges to be addressed.
The numbers indicate that the productivity record of Aotearoa New Zealand leaves a lot to be desired. The nation has a relatively defensible record in producing more goods and services. But much of this has been through the use of more (rather than fewer) productive factors and/or engaging in more (rather than fewer) harmful or depleting activities. In a nutshell, more goods and services have been delivered by more hours being worked by more people, alongside an increase in some harmful activities. This is not a recipe for sustained improvements in material living standards, let alone those non-material aspects of family time, leisure hours, and feeding the mind as well as the body.
Consequently, the recipe we must adopt is to focus on the “less” side of the equation. As discussed in this document and supported by the findings of recent inquiries we have undertaken, investment effort is central to this recipe – whether in supporting development of innovation ecosystems; striving for low-emissions production processes; developing an immigration (and population) outlook consistent with the physical and community infrastructure; or aiming for a fair chance for all, to underpin our social contract.
In short, improving productivity requires efforts (that is, investments) to maintain, enhance and improve the capabilities and qualities of the range of productive factors, institutional arrangements, and resources on our watch. And, as for any investments, these efforts need to be sustained and exercised over a longer term – across years, decades and generations.
For, just like cricket again, the one-day and T20 fly-by-nighter versions of the game are for those satisfied by an inevitably transitory fix. However, as true cricket lovers will understand, the longer form of the game is the more rewarding – a true test of skills, tactics, strategies and understanding. Investment efforts over the longer term are not only where further material rewards lie, they are also where enjoyment of better living standards and wellbeing across other dimensions can emanate from successfully lifting our productivity numbers.
Ngā mihi nui,
Dr Ganesh Nana
Chair, Te Kōmihana Whai Hua o Aotearoa | New Zealand Productivity Commission