Skills and Productivity
New Zealand has a particularly poor record in labour productivity, or what we do or produce for every hour that we work.
Our poor level of labour productivity, and even more the slow rate of improvement in our productivity rate, is a key reason why we are no longer one of the richest countries in the world (as we were in the 1960s). It is particularly important when we compare ourselves to our closest neighbours, Australia.
Why skills matter for productivity
Productivity isn't a measure of how hard we work (number of hours), but a measure of how smart we work (how much we get done).
Its pretty clear that how capable (skilled) we are is a key factor in how well we get things done (and how quickly).
But its also clear that just having skills isn't enough. They have to be the right kinds of skills, and they have to be put to good use. Putting skills to good use means paying attention to a lot of things - motivation, working environment, rewards, plans, teams and many other factors.
So, skills clearly matter a great deal for productivity - but a 'stockpile' of skills isn't (by itself) going to lift productivity. It requires smart thinking in how we organise work as well as smarts amongst our people for that to happen.
Why skills may matter for New Zealand in particular
In our current situation, where we have much more work to go around than people to do it, productivity is even more of an issue for New Zealand.
As a small economy, New Zealand may face particular challenges in looking to improving our productivity in ways other countries often do - such as investing heavily in new technology. This is because the return for such investments may not be high enough in such a small market.
So now more than ever, the saying "we had no money, so we had to be smart" applies to our situation in New Zealand.
Find out more about workplace productivity
You can find out more about workplace productivity at the Workplace Productivity web site, which includes are a range of tools and examples of how firms have addressed these issues.
ITOs are investigating how they can work with the workers and employers the already assist with training, to see how can they improve the productivity of their firms and organisations. A recent report has identified where progress in this area is being made:
The Skills-Productivity Nexus (3961KB)
Also available is a factsheet which provides an overview of how industry training is contributing to improving workplace productivity: