In this article, you will get all the information regarding When smarter work comes from new ideas, it’s about time we had some – Internet Cloning
Got it? Economic growth does not come primarily from cutting down trees and digging things up out of the ground – and scientists are right when they tell us that we need to reduce our burden on the environment, our “natural capital” – it comes mostly from harnessing human ingenuity Think about how you can produce more with less.
For this reason, the report says that improved productivity is “the key to prosperity” and is based on “the dissemination of new, useful ideas.”
More specifically, productivity is improved as people think about how to improve the goods and services we produce, make the production process less wasteful — more efficient — and invent entirely new goods and services.
This gives us a mix of novel products, improved quality and reduced costs.
For the last 200 years, since the beginning of the Industrial Revolution, all developed economies have improved their productivity by a few percent almost every year. In our case, the average Australian’s economic output has increased sevenfold over the past 120 years, while hours worked have steadily declined.
Trouble is, the miracle of productivity gains has been a lot less of a miracle lately. Over the past 60 years, our productivity has improved by an average of 1.7 percent per year. In the decade to 2020, it “slowed down significantly” to 1.1 percent per year.
It’s pretty clear that if we want to return to higher rates of productivity growth, we’ve come up with some new ideas on how to make the service industries more productive without sacrificing quality.
The report is quick to point out that similar things have happened in all rich countries. (It should be noted, however, that the even our productivity is now lower than it was compared to the levels reached by other rich countries.)
This is significant. It suggests that the factors that led to the decline in our productivity performance are likely the same as in other rich economies. But none of them have laid their finger on the root causes of the problem yet.
If they’re still working on the answers, so are we. So the report focuses on what to think about can causing the problem and where we should look for answers. Remember, this is just the first of several reports.
So unlike rent-seekers and ecocrats, it doesn’t offer any magical answers. But it does provide a good explanation for at least some of the productivity slowdown: Over the past two centuries, we’ve produced more with less, largely through the use of newly invented “labor-saving devices” to replace workers with machines in farming. , mining, and then manufacturing.
The amount of goods we produce in these industries has never been greater, but the number of people employed to produce everything is a fraction of what it used to be. And that’s a big part of the productivity gains we’ve seen since Federation.
Because producing more with less makes us richer, not poorer—increases ours real Income – overall employment has gone up rather than down as we have spent that extra income hiring more people doing all kinds of services – from low-skilled to high-skilled.
We (and all rich economies) have been so successful in shifting workers from making goods to providing services that service industries now account for about 80 percent of all our output and about 90 percent of all jobs.
Do you see the problem? Services are mainly provided by people. So the economy is now almost entirely made up of industries where it’s much more difficult to increase productivity simply by using machines to replace labor. It’s far from impossible, but much more difficult than on a farm, mine or factory.
Even more so when you consider that two of the largest service industries are health and social care, and education and training.
It’s pretty clear that if we want to return to higher rates of productivity growth, we’ve come up with some new ideas on how to make the service industries more productive without sacrificing quality. That comes next in the Productivity Commission report series.
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https://www.smh.com.au/business/the-economy/if-working-smarter-comes-from-new-ideas-it-s-time-we-had-some-20220804-p5b7eh.html? ref=rss&utm_medium=rss&utm_source=rss_business When smarter work comes from new ideas, it’s about time we had some
When smarter work comes from new ideas, it’s about time we had some – Internet Cloning
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