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Massey's Alison Brook finds we have been good at creating jobs but not the right sort of jobs. Companies need to invest in technologies for innovation. And we need to lift skills and competencies of both managers and workers

Massey's Alison Brook finds we have been good at creating jobs but not the right sort of jobs. Companies need to invest in technologies for innovation. And we need to lift skills and competencies of both managers and workers
Photo by Carl Heyerdahl on Unsplash

These days everyone is talking about productivity growth, or rather the unnerving lack of it.

It’s with good reason; productivity drives income growth and raises everyone’s living standards.

While many advanced countries have suffered from falling productivity growth since the global financial crisis, New Zealand’s productivity performance has been lacklustre since the mid-1990s. The productivity discussion in New Zealand has become even more urgent in recent years because of fears that the slow adoption of new technologies will leave our local firms even further behind the rest of the world.

While the impact of advanced technologies like artificial intelligence is not yet being reflected in the widespread disruption of the global workforce, it’s likely that the full effect won’t be known for some time. As wider adoption of these digital technologies occurs internationally there is a real concern that this will only exacerbate New Zealand’s relative productivity position.

Source OECD

The effect of declining labour productivity

Declining global labour productivity, or output per hour worked, is often referred to as the “productivity puzzle”. It is a puzzle that needs to be solved if we don’t want to see our standard of living and economic growth continuing to erode over time.

According to the New Zealand Productivity Commission in a recent report, if productivity stays at the current level of growth, then real GDP will be 18% lower in forty years’ time. New Zealand’s GDP per capita is 30% below the OECD average, and similar to that of Mexico, Greece, Portugal, Israel, and Japan. By comparison, OECD research suggests with New Zealand’s policy settings we should be generating GDP per capita 20% above the OECD average.

GDP per capita (% of average of top half of the OECD)

The primary drivers of productivity growth are investment and innovation. For these conditions to exist the country needs to have an environment that fosters openness and competition. Competition is the key, as it weeds out the weaker, non-competitive firms and enables stronger companies to thrive and innovate.

The current government, for its part, is looking to address competition issues at a firm-level through the proposed changes to the Commerce Act’s anti-competitive behaviour provisions. At an industry level, it has begun market studies to analyse the level of competition within the sector. The first of these was the retail fuel sector with more of these to follow.

Weak labour productivity for three decades

Unlike other developed countries, New Zealand’s productivity decline has been longstanding. It emerged in the 1990s following extensive free-market reforms, which turned New Zealand from one of the most to one of the least regulated countries in the world. While designed to boost the country’s competitiveness and productivity, New Zealand’s labour productivity is currently around 40% below the top half of  OECD countries. A 2016 study by the Productivity Commission found that NZ firms were on average one-third less productive than comparable international firms in the same industry.

In addition, since 1996 New Zealand workers work 17% more hours than the top-performing OECD countries but achieve below-average incomes and relatively low living standards. What was it about these reforms that failed to deliver productivity gains?

Drivers of poor productivity in NZ

Weak productivity growth in New Zealand seems to be due to a mix of factors including the high cost of capital, small markets and firm size plus our remoteness from large international markets. This, plus high population growth, relatively low wages and a labour skills mismatch has meant New Zealand firms are more inclined to throw unskilled labour at production issues rather than investing in new technologies which would ultimately make them more efficient and internationally competitive. An increasing number of international firms in the construction, retail and food sector are now spotting an opportunity to set up in New Zealand and potentially disrupt our local market.

One of the key factors in New Zealand’s poor productivity growth seems to be weak technology diffusion. Technology “diffuses” or spreads throughout the economy when firms decide to adopt it. This is important for economic performance as technology diffusion tends to lift a population’s skills and wages and improve their overall standard of living. According to the Productivity Commission, technology adoption in New Zealand has stagnated because of uncertainties over costs and benefits, risk aversion and management capability.

Despite the myth of New Zealander’s being early adopters of new technology, it is clear this is not the case. As the draft New Zealand Technology and Productivity report explains, New Zealanders have “historically been poor at adopting new technology” which is hurting our productivity rates.

The benefits for non-tech firms adopting technologies were the subject of Harvard University research last year. It found that those non-tech firms who adopted digital technologies:

  • Showed stock price movements that had more in common with technology companies than to their industry peers, suggesting that their digital activities were making them similar to tech companies
  • hold more cash and are larger, younger, and less capital intensive
  • had higher valuations

Having the right skills on board is important though as the study showed firms with senior technology executives performed better when going digital.

“Low to middling” management capability

According to one study (Green and Agarwal (2011)), New Zealand manufacturing firms rank poorly in terms of managerial capability compared to our better performing OECD counterparts. Other research suggests that New Zealand managers lack the ability and the incentives to manage the assets and resources of the business to create value for shareholders. This is exacerbated by the high level of owner-operated firms where owners can control and influence the management of the firm to protect their interests in an already weak competitive domestic market.

Bright spots on the horizon

Despite the big hurdles facing New Zealand businesses and individuals in the coming years, there are some promising signs that the next decade will bring different results from our experiences over the past three decades. According to funds manager Simplicity, New Zealand is slowly moving from a capital-constrained market reliant on overseas funds to one that will be flush with local funds from Kiwisaver, NZ Super amongst others. This new capital base provides local business with an opportunity to invest in their staff and technology requirements and gives them a chance of competing on the international stage.

New Zealand has been good at creating jobs in recent years but now it needs to focus on creating the right sort of jobs. It also needs to focus on creating a business environment that is adaptable and fit for purpose for the next stage of growth. Companies, for their part, need to invest in new technologies that will encourage innovation. Most importantly they need to commit to lifting the skills and competencies of their managers and workers. In a global market, we are all competing on the world stage and we need to make sure our workforce, products, services and business processes are truly world-class.


*Alison Brook is from the Knowledge Exchange Hub at the Massey University campus at Albany, Auckland. She is on the GDPLive team. This article is a post from the GDPLive blog, and is here with permission.

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63 Comments

I think poor management capability and capacity is a massive issue in NZ. No one gets proper training for this. Look at schools for instance. Principles have no qualification requirements for management before they go into their roles, and then ongoing professional development is limited to progressing national or personal education outcomes. This often results in mismanagement of assets (buildings) and inefficient use of staff time (stupidly long meetings with little to no benefit to teachers). The same issue would be apparent in a whole range of industries. I think if we had a culture where our managers have consistent training in what is required to be a manager we could see massive productivity gains by eliminating some of our most wasteful practices (meetings) and enabling our workforce to deliver their best (by actually teaching managers how to manager), Management needs to be seen as a specialist skill set, rather than a career progression that rewards people for sticking around long enough. We'e all had shit managers. Getting them out of the way would add a lot of value to the economy and improve everyone's well being.

Indeed. My take on this is that companies need to promote specialist skills within their organisation to 'management' so they can justify paying them more money, to stay. Some people have rare skills and should be just left to employ them in the workplace and pay them accordingly. And other people are great at people management and not much else. They don't necessarily need to be paid more if they are happy fulfilling that sort of role.

Totally agree. Management is a learned, technical skill.
Another prevalent issue in NZ is mixing up management and leadership.
Sometime the two attributes co-exist - often they do not.

I often see New Zealand companies with technology teams that sit on entirely different floors or offices to the business staff. What chance do these people have of delivering business solutions and improvements? I once asked a product manager from a bank how business was going now they had adopted a new solution and he just said "I don't know". He was just happy that he had ticked the box and cared not for the result. In Germany you will not find this attitude among even the people who do the cleaning.

In my humble opinion, short term thinking has been the main inherent problem to the way management runs their business in New Zealand.

The catalyst has been successive governments, who primary focus has been getting re-elected. They have made no hard calls, for the fear of losing their position of power. Big monopoly type businesses know this, and extort commercial favours from the keep the peace politicians. Most legislation introduced is to protect big business, who through scale can absorb these costs.

With small business, this legislation comes with an increased cost of administration, which is a burden that cant be passed on. Talk to any small business owner, and they'll tell you its driving them out of business. Government policy advisors have no understanding of the cost or time these increasing legalisative regulations have on small business. If they only realised small business in a country of this size are the life blood of NZ's economy, and for the most part much more efficient than large businesses.

Small business, unlike large business can't support inefficient works. Reduce legislative overhead costs on small business is the answer to driving increased productivity. Globalisation is a myth driven by governments controlled by big business, where the spoils go to the few.

Totally agree. When did good ( or bad ) teachers become good managers?
Working in the photocopying industry I saw good salesmen ( driven to perform individually) promoted into looking after teams as 'managers', and CEO's. No wonder they fell out over a $500 million scam.

Productivity will keep dropping and the fundamental problem is a non meritocracy society.

I have been watching Heather Mac Donald (https://www.youtube.com/results?search_query=heather+mac+donald) recently.

She explains the costs of lots things that left wing pursues -- all kinds of affirmative actions and artificial equality.

I guess one of the costs is the decreasing productivity.

It will be interesting to see Chinas productivity for the 3 months to Feb.

Now, that is the thought to ponder, decreasing productivity, but yet increasing consumerism.. someone/somewhere should have 'produce' things for this consumerism right? they've productivity rate higher, BUT then if not mistaken - eventually those one that keep on producing things, started to think, before I die I would just retire & consume. Is it perhaps? that this is a global cyclical process? - Anyone knows? - would it be wise for any Nation on this planet? to consider moving their production/productivity off shore? - My personal view? - albeit, seems to be small/insignificant/costly? - Each of this Nations on this planet should be have it all by it's own, then started to trade/bartering between Nations, the way NZ goes now, I am not surprised if the weekly rubbish pickup.. is to be outsourced to foreign countries. Wanna bet?

As far as I'm aware there is no good evidence that technology improvements (IT) drive productivity improvements unfortunately.

I would suggest professional management would be a substantial benefit in this area however.

Go look up Industrial Revolution - Britain.

The industrial revolution was really about humans learning to harness a large exogenous energy supply (fossil fuels) to do productive work (rather than relying on wood, human or animal power). Sure you could try and credit the steam engine to a degree, but the real driver of the growth was the huge surplus of energy opened up and suddenly available to do useful physical 'work'.

This is what PDK's been banging on about for years but a lot from an economic background seem to ignore.

And water, which in the form of hydro, is still with us and supplying around half of NZ's 5-6Gw baseload....a Dutchman from the sixteenth century, if taken to the machine hall at Manapouri, would be amazed at the scale and at the location, but not so surprised at the core (turbine) technology.

Two things

1. Technology and IT are different.
2. Automation or better leveraging human labour to deliver higher outputs per human (which is a factor of general technology as well as IT) absolutely drives growth.

There is abundant research that supports this.

Agree.

There's also the problem within this of human capacity to take up and use ever burgeoning tech capabilities. A problem of focus, training/learning, application of tech.

x2 agree. Tech leverage has no sick leave, babies, kiwi saver, need extra paid leave because its partner abuses it, and is oblivious to the stress of 2 hours each travel because of stupid speculative house prices. In fact technology simply serves to underline the decrease in productivity all of the above have forced on businesses, all the while successive governments support globalisation decreasing margins for product and services. AKA a double whammy on profit squeeze. No wonder everyone just wants to speculate on houses, its by far the easier (lazy) option, and why tax need to change to land tax over labour (wages).

Example. Sawmills. Seen a manual labor saw mill lately... no chance. Anything left has a good degree of automation in its operation. The alternative is again the lazy option, we can always just export logs and put more people on the dole.....

Be careful by cutting meetings, a good rule is have a meeting once a month.I used to work for a company that had hardly had any meetings, the miscommunications and problems it created. Management did not know what was really happening, many issues could have been averted.

They think they are saving money, long term and mid term it doesnot.

What does New Zealand really want to be? Why would anyone from overseas or on the ground here invest significant capital without that answer being known?
It feels like we are more and more uncertain about this.

My company spent millions on hi-tech analytical applications over a couple of years and further hundreds of thousands in staff training. Despite all those upgrades in the virtual environment, our management hasn't offered anything better to the younger upskilled staff in terms of salary upgrades, career prospects, non-financial incentives etc. Many will surely end up skipping NZ for greener pastures where their skills are better acknowledged with what they deserve.

My point here is advanced tech can't make up for productivity leakages resulting from outdated management techniques in today's world. Our preference towards years of experience over talent and merit needs to go.

Our productivity is based on Hours worked. Do your hours, get paid.

Where is the incentive to be more productive?

The productivity pussle is only a pussle for those who think about the wrong things. I'm with Raoul Pal on this one. It is all about debt, debt and nothing else but debt.
https://landing.hedgeye.com/realitycheckwithraoulpal/
https://www.realvision.com/

Foreign Direct Investment into an advanced economy either causes increased unemployment or increased debt. Read Michael Pettis, eg:
https://carnegieendowment.org/chinafinancialmarkets/79261

Our dear leaders, misled by legions of earnest but misguided bureaucrats and academics, have repeatedly done their level best to turn our beloved New Zealand into a third world country by incentivising, pandering and sycophantic obesiance to any and all purveyors of the deadly poison of foreign direct investment. Result, low productivity, low wages, and absurd levels of household debt.

Not all foreign investment are the same. There are examples of inward greenfield investments that have lifted wages, productivity and living standards.
Spotify (Swedish owned) runs most of its high-skilled operations from the Valley area due to availability of talent and a high-functioning tech network in the region. Alibaba has most of its AI/ML engineers working out of its US offices for the same reasons.

But what possibly could a high-flying investor gain from this country by building their presence here unless it's a sales office? Where on the list of preferred destination for futuristic firms looking to put in growth capital do we appear?

We have somehow managed to even scrape the bottom of the barrel for bringing human capital from countries where talented people are desperately fleeing overcrowding and shrinking economic opportunities.

In Nelson, it seems there are a very few standouts where foreign investment has worked wonders, Nelson Pine Industries MDF plant being the only one that springs to mind. Foreign investment into this country is usually counterproductive property investment that merely skews the investment landscape (and cost of workers' accomodation) and the exchange rate resulting in poor profitability (and hence shortage of capital to fund expansion and new capital equipment) for non financial/property related businesses. Refer to Michael Pettis for a rigorous and fuller treatment based on accounting, not phoney "economic models".

Foreign investment in NZ largely focuses on monopoly businesses, which are price setters; and their lobbyists keep the government from regulating their prices.

The only benefactors are the overseas shareholders, which dont suffer the consequences of artificial high prices, low wages and no local competition.

Agreed. Classic example in the last 25 years was Telecom prior to separation. Monopoly protection anyone. See how far ahead we are now in terms of network compared to Aussie. Telstra is still monopoly.

Poor management is an issue that isn't being addressed at all, and it is an issue in both public and private sector.

Lack of appropriate IT infrastructure is another problem. In my office the technology would be very different if I wasn't guiding the direction, and it wouldn't perform nearly as well.

On an individual level people need to add efficiencies to their own work (assuming they have the scope to make changes) but I suspect many are too overloaded with work to improve their own practices. Some improvements lend themselves to automating processes. There are businesses that invest heavily in automation and that boosts productivity from the same or fewer workers producing more work (and profit).

What I usually see is the reverse of what should be happening. Management making bad decisions or training staff to be less productive. Automation projects that send communication and productivity backwards leading to more conflict. Throw in a lack of motivation to improve on a personal level and apathy sets in.

There are teams of contractors where we have pointed them to higher profit work which would take minimal learning and improvement and they aren't interested. They could do the same quantity of work in a specialised area and get more money (productivity), yet they don't care or understand (in some cases).

To fix productivity we need to change our culture.

Of all the comments on this issue this was the only one that touched on "Culture". Productivity has never been a component of the New Zealand workforce-save for farmers who must and do compete with other farmers to stay in business. A simple example of how wide spread the lack of productivity culture is embedded in the Kiwi culture I would use the example of last weekend's restaurant outing. In the course of 20 minutes four different table servers interrupted our foursome's conversation to ask if we were ready to order our food. Overstaffed is what I find in most retail settings, and under supervised as few of the managers/supervisors have ever operated in a truly productive atmosphere. Its no better in the larger operations like the major food retailers or building products firms. Measuring output per worker and looking for productivity gains does not seem to be anywhere on the radar. For a former automation specialist from America I observe but try to say nothing. I ran a small factory in Auckland in the 70's and was thus on the coal face of observing the local culture of productivity and it seems little has changed in nearly 50 years as few local businesses are driving productivity to the point of putting their competition at risk.

Fundamentally we need to start with changing high school education which is focused on making employees to making business owners. That would better prepare students to the world they will face.

At tertiary level we need correct signalling of the type of graduates that are needed as we aren't getting them in the proportions that are needed. However this is also a problem within families where a family will put pressure on the kids to do something specific, often something that aren't good at and actually isn't needed. There's still too much obsession over going to university when we need more people in trades.

There are massive problems with low productivity in the public sector. There are plenty of jobs that are just spending a budget rather than producing work. However that would need transparency that doesn't existing and mechanisms to hold ministries and departments accountable for their (lack of) actions. Low productivity in the public sector is not a problem unique to New Zealand.

Switzerland has high productivity. It also has half the number of school-leavers going into full time tertiary education but on the other hand has a very strong system of putting schoolchildren into businesses on day release - not just fast food but every kind of employer even investment banks.
So I agree with you - less tertiary education and lets break down the divide between college and work.

I have relations in Switzerland - they leave school and go out to work for a year or so then go to University or other training. Most of the men go into the army as well for compulsory training and then go onto career training. Its much more practical based and they treat all occupations from Uni to trades to non trades with respect. They recognize everyone has a place in the cogs of life. They have great public transport so you don't have to live in the main cities - Zurich has around 1.3 million people out of 8.5 million - you can live and work anywhere. Many of my relations there don't have a car and haven't for decades - you don't need one as the Trains, buses are so good its a waste of time and money. The lakes and rivers are super clean - people swim all the time in Lake Zurich (in summer!!). If NZ had there population density it would be a real sewer here both urban and rural. Similar landscapes, higher population density - makes you think.

They have developed a system of referenda to rein in at least some of the stupidity of their politicians and bureaucracy.

Personally I found the flag referendum a totally novel experience, I actually got to vote on an actual issue. I found it was really interesting, as I found myself respecting the opinion of those who voted the other way from me and was therefore happy to go along with the outcome. As I suspected, the majority were for sticking with our traditions and voted against radical change.

It amazes me how rash we are with our cultural inheritance, how willing we are to throw away everything that has created the civilised society we enjoy. Maori have had a cultural revival, but the rest of us seem intent on cultural suicide.

Enjoyable comment.

As far as I'm aware, in Switzerland local councils have a small catchment, which means the politicians can be seen and live to the community they are elected to represent. This holds them more accountable. I believe it is an expensive place to live however, and not sure how the street cleaners survive.

The idiot Rodney Hide and the Act Party advocated for big council (i.e. Auckland Council), as it becomes faceless and largely works for big business; to keep the jobs, rather than the people that elect the Councillors. I'm sure most Aucklanders would agree.

Big business have a different set of rules, which involves privatising profit and socializing losses.

It's not just big business, it applies to governmental departments and local councils too. Every large organisation is run primarily for the benefit of its management class. They corrupt the organisation for their own benefit, at the expense of the owners, the employees and their clients.

We live in an oligarchic bureaucracy with democratic characteristics.

One day I might do an infographic of the NZ oligarchic corruption, showing the number the employees by organisation and how outnumbered the individual is. Trouble is, that sort of detailed research is not my strongest suit, I can do it, but other people will probably do a better job, so I've been hoping the data is out there somewhere already.

Yes supporting the tech industry in NZ would very much help to boost wages and our economies. Problem is that our tax and cost of living in our main cities is way too high. If NZ is serious about shifting it's economic focus away from the false economy; Property to a real economy like Tech. Then it needs to support it to help those business to flourish and grow.

I would propose lowering our business tax rate to be more globally competitive for "real economies" such as tech, farming, exports, tourism etc and keep it at the current rate for any business related to property, building construction and related areas.

NZs productivity issue is basically down to:

(a) shallow capital markets/lack of risk taking in investment from instos - they only want to invest in sure things like housing stock, farms etc.

(b) complete deregulation leading to a lack of State support for emerging industries / no commitment of a State mandate to consume NZ generated goods and services - a big issue given that the State accounts for ~30% of GDP if I recall correctly

(c) weak governance at the management and board levels

(d) lack of incentives to invest in upskilling the workforce by employers - all the costs are passed to the individual, while Business NZ bleats about lack of skills

(e) complete disconnection between employers and employees interests

Point (b) - A good place to start would be mandating smaller state departments and agencies (ICEs, research institutes, etc.) to shift their main banking to local suppliers (TSB, SBS, Heartland, KB).
This move should have far-reaching benefits for the entire financial system of NZ as larger operations and more capital will equip local banks to give their foreign-owned competitors a run for their money.

Add in weak companies act that allows people to get away with dodgy stuff. How did Mr Blue Chip and Mr Money Managers evade long jail terms.

"" New Zealand’s labour productivity is currently around 40% below the top half of OECD countries. A 2016 study by the Productivity Commission found that NZ firms were on average one-third less productive than comparable international firms in the same industry.""

Is it a daydream that a political party will make this the centre point of their electioneering?

Why are my adult working children one-third less productive than they would be in another country - they work hard, they are clever and they are honest.

Our current government is very successful. It very efficiently promotes and facilitates the production of children that are unaffordable to our society. I would say NZ leads the world in this regard. Patsy economists neglect to mention this measure of productivity. Middlemore hospital is indeed about to double the capacity of its maternity factory.

Nope you need a fact check
In 2019, birth rate for New Zealand was 12.5 per 1,000 people. Birth rate of New Zealand fell gradually from 22 per 1,000 people in 1970 to 12.5 per 1,000 people in 2019...and still falling.
https://knoema.com/atlas/New-Zealand/Birth-rate

Ah, so NOW we are told that management, not Unions or labour, are cause of poor productivity.
Despite all that pain and suffering and privatisation and out sourcing and quangos and National and Labour ageing each others market reforms (as they like to phrase it) from 1984-98, NZ is still miles behind the top half of the OECD. Could too much heap labour from immigration and pathetic median wage levels have any connection to this?

Anything but our privileging of property speculation and penalising of productive labour, would seem to be the approach. Acknowledging such a core issue would mean a need to change.

I've lost count of the times I've made this point, but here goes.

Productivity is work-done per hour. Work is done 99.7% by fossil fuels, globally (and pretty much here).

So human labour is 0.7% of work-done. Mere noise. Not worth discussion. As for the rest, it's parasitic on the energy/work continuum - something economists are not taught. As this piece rather proves.

Its culture. I have Swiss relations and have also worked for large USA firms. When you work there you do your job in what you do and do it well. You are part of a machine that has many cogs that all do what they are meant to do. In NZ everyone has a bright idea of how to do it different and "better". Its the No. 8 wire mentality. As a result the cogs don't all work well. We can do small medium ok with hard graft but we really have very few big companies that can cut it - Mainfreight, F and P Healthcare. Look at the Germans and Swiss - they don't squabble over stupid theories - they accept the science and then all pull together and accept there place in the whole and do it.

read this: https://www.goodreads.com/book/show/477.Collapse_of_Complex_Societies

and be very pleased we're closer to the No.8

On my trips back to family in Switzerland, Im 4th generation NZ, I think I can see whos got more problems by far.

In my experience most of the good managers this country educates leave NZ and rarely return. Whats left simply make the best of their limited skillbase and fail miserably in the process or capitulate and invest in rental housing because they really can't run a business properly.... On technology, we simply don't have the tech investment mindset in this country. That horrible kiwi number 8 wire mentality really holds us back. Get with the tech NZ Inc!

It is certainly true that Kiwis make great middle management workers - when you find them in other countries. Friendly, pragmatic, approachable but clear thinking. Why not try and keep them here? All it needs is higher wages and cheaper housing.

Rubbish, kiwis excel at ceo level also, there aren't enough roles to keep them here in nz unless running a bottle store qualifies

I guess you are right about CEO roles but my working life was well paid middle level - didn't get to meet many CEOs.

Aren't we going round in circles - the article says we need good middle management to achieve productivity, the OECD says NZ is very good at producing skilled people. If NZ wants productive businesses that can match or at least equal the best in the world then we need to keep our best in NZ and invest money into business rather than housing.

we are in circles, so for a circuit breaker... I propose eliminating student debt. However in order to stop driving our best off shore to pay off their debt right when we need them to enter the workforce here and raise the fortunes of NZ Inc do we need to have a discussion about the breadth and width of debt funded tertiary education in this country? I have several grumpy uncles and aunts with more money than they know what to do with YET they still receive Government Super...I think that is ridiculous when it it could go to a young person starting out...

The bulk of the free market reforms were done in the 80s with the tail end in the early 90s, well before the decline. I'd have to assume productivity growth was quite good during that period. Funnily enough, the far from market friendly Clark Labour government came to power in the mid-90s. Perhaps this government should be associated with the fall-off in productivity?

It seems that we have different colours of what Orwell called oligarchic collectivism; the red international socialist party, the green international socialist party, the black national socialist party and the blue international socialist party. All seem intent on gaining power and then transferring wealth and power from the other tribes to their own politicians and the state bureaucracy (with a few scraps to their supporters) . All worship and offer obeisance to foreign capital (so they and their tribe can benefit), believe in immigration (to keep the workers in their place), and recommend MMP (so the party apparatus can control the choice of candidate). All in order to strengthen their own grip on power. Result, stagnation and decline.

If you're in the tech sector and are able to work remotely - in the next financial crisis when our dollar plunges again you can be part of the export sector plying your skills overseas. We'll end up being to Australia what Eastern Europe is to Europe.

Big tech players in NZ are already doing significant teleworking (mainly higher end skills) into Aussie on the back of 10% super and stupider house prices making NZ a much cheaper alternative. There are so many kiwis there (so they can buy a house) that teleworking kiwis are perceived very well, vs Indian teleworking. This has the added impact of leaving less skills for NZ based work.

Companies are. Tech is being used to avoid having to take on more staff, or eliminate them. This is a trend that will continue because stupid house prices and rents are making wages less affordable than tech alternatives.

Whinge, whine overload. No one out on the streets.
I'll have to get out a reminder of how things used to be.
Oh, here's a book called "The Swinging Sixties" by Graham Hutchins, on page 247 there's a photo which includes myself out on Queen Street protesting the French nuclear tests in the Pacific. And, yes, we did achieve....no more tests in the Pacific!
Oh for the old days when us baby boomers actually did things, and actually acheived things.
What a gutless lot this younger generation is, hunched over their devices in their bedroom or basement.
But do have a break.....make a cat video for youtube.

Ha...yes your free uni fees gave you ample time to wander around drinking lion red and checking out bands and expermeting with drugs. I protested and supported the fleet heading up to the Pacific.. remember also we sent a frigate. Now a days Mps such as JK would rather have tea with the Queen than stand up for NZ. Also how much rent did you pay week...$50 bucks? Did both your parents work 40 hour weeks? The youth of today are working hard don't worry and a way more smart than you realise..the revolution is happening under your nose. But if they do march in the street they are told by you and your fellow boomers to go get an education first (and a large loan). If they moan about the cost of living they are told it's was harder in your day. If they protest about climate change they are told by your generation it is fake news. Good luck with your super and gold card but please sit down.

Great article as always guys. And a wide offering of reasons for our decline as always as well. Brilliant everyone. This is the best news website in the country, without doubt. So, how to harness all this creative energy & lift our personal productivity back up the OECD ladder? This is indeed the question.

I see pockets of it above, but as usual it is mostly words & not many deeds. What I mean by that is that interest.co.nz should convene a conference on exactly this topic & start a political party as well.

When I think of my own journey through the work force two things became clear. I had to be a better business person or I was going to go broke. And alongside that, I had to be a better person generally, if I wanted things to go my way. Both required an investment of time (& money) & both are still ongoing. I did not have the means to change everything else, I could only do me. And believe me, that was hard enough. So, long story short, I did, because I had to. It's called survival. This is a similar journey of almost every successful small business person (& successful big business person as well probably) took to eventual success. This despite governmental regulations that turned our businesses into a tax collection agencies at the same time. Sadly not everyone thinks like this. We have created a huge underclass that has been spoon fed & don't know any different. In fact, they are more angry today than they were when the process started 50 years ago. That's an issue. Especially on this subject. To finish: We have created the seeds of our own destruction. It is too late to turn back now. Over a million people born here have seen that & left for pastures new. Sadly, this story doesn't have a happy ending. I'm sorry.

You’ve got your answer right here...”high population growth […] has meant New Zealand firms are more inclined to throw unskilled labour at production issues rather than investing in new technologies”. Why such high population growth? Massive immigration programme (relative to population) which began in the 1990s. Sort that out, let a bunch of low productivity industries scream and squirm and either fail or re-tool. Just that successive governments have not had the balls to change tack and rather listen to vested interest groups.

Non-sensical, produtivity is less important in today's world - the easiest to eclipse that productivity number is to increase the land/asset sale base, then recorded among the GDP ratings - voila!, the new economic prosperity recipe - announced from time to time in NZ, we lead the world on this - so, don't under estimate this new paradigm.

From that timeline mentioned in the article, the problem started showing worldwide, when the productivity tend to be aligned with numbers this will lead to quantity games, not a diligent quality of service. Short term management that quantity based, tend to 'eliminate/abolish' things to make the number up. The best practice is to manage those inefficient quantity based into more efficient operation, which in turn is lead to good quality, best practices approach. The eliminate/abolish/relocate/outsource, in the long run will give poor results.

Try to be the last in to work and the first out. Spend your day talking about how drunk you got last night and last weekend and how drunk you're going to get tonight and this weekend. Have no other interest besides, say, cars, rugby, and residential property. But mostly just fixate on being as drunk as possible as often as you can. Mock and undermine anyone you meet who has any interest in anything else or in doing anything with their life or making something of themselves. They are probably gay child molesters and must be cut down and destroyed for having such absurd ideas. Go overseas and be exactly the way you are at home because the locals will love you. Everybody loves Kiwis. They think our accents are awesome and they want to move to New Zealand and buy houses and tell the world how great the place is and how it's godzone and Kiwis are so cool. The whole world will be watching and it'll put New Zealand on the map.

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