Productivity: a catalyst for competitiveness and sustainable growth and development

October marks Productivity Month in South Africa. The theme for the 2018 Productivity Month is “Productivity: a catalyst for competitiveness and sustainable growth and development”.

As we grapple with the changing socio-economic and industry landscape which is mainly brought about by the rapid rate of globalisation and the fourth industrial revolution including associated disruptive technologies, we should take pride in our capability as a nation to dialogue and resolve our challenges.

The time for dialogue and solutionist thinking is more needed than ever before during October, which is designated as the Productivity Month in South Africa.

It is during October that we should reenergise and refocus our energies as a nation to promote a productivity culture and mind-set and to highlight productivity (labour productivity or total factor productivity) as a catalyst for competitiveness and sustainable growth and development. This we should do emboldened by empirical evidence from studies across the world, particularly in the most competitive economies (GCI: 2017), including Germany, the Nordic countries and Asia that, improving the levels of national productivity and innovation is the most efficient way to realise the average GDP growth rate, employment growth, business efficiency and reduced costs of doing business. The productivity level also determines the rates of return obtained by investments in an economy, which are essentially the fundamental drivers of growth rates. This argument is also backed by empirical evidence that, it is through enhanced productivity that economic growth is generated, the exports and trade position of a country become better enabling it to compete globally, and skills and decent jobs are created.

Furthermore, there is empirical evidence which suggests that, it is arithmetically impossible for a country to create and sustain wealth if wages do not grow significantly faster than inflation, and that these cannot happen unless productivity grows at the same rate. Therefore, it is impossible to discuss productivity without considering the contribution of labor as it is a major driver of productivity. It is worth appreciating that, behind productivity growth is the worker, a strong work culture, and the worker working smarter.

It is therefore, critical that as we engage in dialogue during this productivity month as a country and policy makers, the issue of slower productivity growth in the productive sectors of our economy generally, in particular in SMEs should be our priority. One of the key considerations in this regard should be that, if South Africa is to achieve a high-income economy, we should acknowledge and embrace productivity and innovation as the main drivers and game changer for long-term economic stability and living standards. The dialogue should also focus on the contribution of the workforce to the productivity and competitiveness of the workplace, and in general of the economy.

We should steadfastly promote and facilitate best practices in productivity and innovation to improve the competitiveness of our economy, with increased support for entrepreneurship and employment opportunities for youth and women as well as small and medium enterprises (SMEs). We should be doing this with the conviction that, entrepreneurs and SMEs are more likely to use innovation to develop products and services that people want or need, to create decent jobs, and enhance sustainable and inclusive economic growth.

During the productivity month, we should mobilise South Africans to join the productivity movement as ambassadors as well as inculcate a productivity culture and mind-set in all that we do as a country and society.

Productivity is important because it has been found to be the main determinant of sustainable and inclusive growth and development, and an essential factor in economic growth and prosperity, as well income levels. And income levels are very closely linked to human welfare. A competitive economy, is a productive one, which in turn leads to growth, which leads to income levels and hopefully, at the risk of sounding simplistic, improved well-being.

As Productivity SA, we have designed our Enterprise Support Programmes to support the country’s strategic objectives in scaling up efforts to promote long term industrialisation and transformation of the economy targeting SMEs within the productive sectors of the economy, with a focus on IPAP Priority Sectors. The Programmes and service offerings assist the country to achieve the Sustainable Development Goals, in particular, Goal 08: Promote Sustained, Inclusive and Sustainable growth, full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

While economic growth and productivity growth have been declining in the country since 2008, we believe that a focused attention on productivity amongst other interventions, will provide the country an overarching framework to tackle the achievement of several of the Sustainable Development Goals. For instance, greater levels of productivity (if also coupled to higher wages), targeting the productivity sectors focusing on the SMEs in the rural and township economies, will help this country “end poverty in all its forms everywhere” (Goal 1); “end hunger, achieve food security and improved nutrition and promote sustainable agriculture” (Goal 2); and “reduce inequality within and among countries” (Goal 10). Increasing productivity in manufacturing and agriculture and industrializing the rural sector and township economies will of course require better access to infrastructure, including social infrastructure and labour quality in terms of knowledge and skills, which Productivity SA provides to entrepreneurs and SMEs.

It is therefore important that the critical and strategic role of Productivity SA in the economy, which is to lead a productivity driven growth and development agenda, including promoting and integrating the productivity and competitiveness mind-set and culture in everything we do as a nation should be understood and embraced by the country as a whole.

During this Productivity month, we urge everyone to accept that productivity and competitiveness has to be a priority - we cannot continue to ignore this very critical bedrock for growth. The culture of embracing productivity requires of the acceptance that, productivity is the effective and efficient use of resources to achieve desired outcomes, and this culture should be instilled in our society if we want to see change.

Productivity SA will this year once again embark on an awareness drive during the month of October. As part of Productivity month, we will also be celebrating the National Productivity Awards. The National Productivity Awards event aims to recognise and provide a platform to inspire a competitive and productive South Africa. The Entity uses the awards to galvanise all South Africans to embrace the concept of productivity as a way of life, enhance Productivity SA brand and increase our footprint through various activities during the Productivity Month.

The National Productivity Awards Gala Dinner, will take place on the 19th October at the Gallagher Estate. I hope to see you all at this prestigious event.

It is for these reasons that all the role players in the South African economy, both in industry and society in general should be mobilized to join forces and focus on the productivity revolution. For a revolution of this kind and magnitude, we require productivity appreciation, productivity revolutionaries, and productivity ambassadors.

In conclusion, allow me to use the words of former Chairman of the Japan Productivity Centre, Mr. Kohei Goshi, who said “Productivity is a long haul, a marathon without a finish line, but so long as we have confidence and keep working at it together, we will stay in the race and ahead in the race.”

We invite all South Africans from all walks of life, in particular the employers and workers of this country to join the Productivity Movement. Enjoy Productivity Month!

Mr. Mothunye Mothiba
CEO: Productivity SA