This is the first in a four-part series that explains productivity and why it matters to investors.
What if you heard there was a way for Canada to achieve improved economic growth; create more jobs; generate higher incomes; lower prices; improve standard of living; improve public services; and generally build a better economic future for Canadians. Sounds pretty good, doesn’t it?
What could do all this you might ask? Well, the answer lies with something that most Canadians know little about—improving “productivity.” And while improving productivity can help us achieve such benefits, there are no guarantees that all these benefits will be realized. It will depend on the decisions that are made if we are successful in improving productivity. So, at the outset, let’s be clear that improved productivity brings opportunity for economic benefits—not a guarantee.
But What is Productivity?
Productivity is essentially concerned with how we combine our various resources—labour, tools, equipment, etc.—to produce goods and services. That is, it relates to the decisions we make, and the actions we take, to try to make the best use we can of all the various resources we have available.
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Investor Education: Productivity as explained by Gary Rabbior |
Over the decades—indeed centuries—learning how to be more productive has been the key to our economic progress. As we shifted production activities from agricultural activity to manufacturing, our productivity improved. As we applied new technology and knowledge to our manufacturing, our productivity improved. As workers became more educated, skilled, experienced, and trained, our productivity improved.
But if productivity refers to how we use, combine, and apply our various resources, what does “improving productivity” mean? To answer that question, we need to know how productivity is measured. And that is not an easy answer.
Measuring Productivity – It Isn’t Easy
