Tag Archive: Productivity

May Your New Year’s Resolutions Stick-Happy New Year 2018!

Greetings and Happy New year 2018!

“Know what you want to do, hold the thought firmly, and do every day what should be done, and every sunset will see you that much nearer the goal.” ― Elbert Hubbard

To many of us, the arrival of a new year generates a fresh beginning. It brings anticipation and hopefulness of a clean slate of 365 days to come. New Year is a gift. It’s a blank page waiting for you to write on it.

That said, a new year, is like a new invitation. It comes with new opportunities or new beginnings. So what if you made mistakes and errors last year? So what if you didn’t achieve your set of goals last year? Not all is lost. In fact, maybe nothing is lost at all. The good news is that you have a choice start a fresh!

“When defeat comes, accept it as a signal that your plans are not sound, rebuild those plans, and set sail once more toward your coveted goal.” ― Napoleon HillThink and Grow Rich

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Too Busy For Your Wellbeing?

“I wanted to figure out why I was so busy, but I couldn’t find the time to do it.”
― Todd Stocker

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Pixabay

The world we live in is overrun by stress. In today’s society, people have incredibly busy lifestyles and almost everyone seems to be in constant action these days. I’ve heard business leaders say that they’re too busy to invest time in any leisure activities.

Think about those who work for about 40 hours a week, and probably have to extend those hours because of projects they must work on. Others have high demanding jobs, with hectic schedules and probably have to travel frequently across borders. Others have families and must work to earn a living. Such daily activities can make us feel tired, stressed, and depressed and that can be quite challenging to our ability to live healthy life.

I totally understand the value of time. The ‘every-second counts’ a.k.a ‘time-is-money’ kind of mindset. I totally get it because I’ve been there myself.

Thankfully, there are many outlets of escape from the total madness we face in our everyday life. All you need to do is make use of some leisure time!

I came across an interesting  poem by a Welsh poet, William Henry Davies (1871-1940), who is also best known for his short poem ‘Leisure’

 

What is this life if, full of care,

We have no time to stand and stare.

 

No time to stand beneath the boughs

And stare as long as sheep or cows.

 

No time to see, when woods we pass,

Where squirrels hide their nuts in grass.

 

No time to see, in broad daylight,

Streams full of stars, like skies at night.

 

No time to turn at Beauty’s glance,

And watch her feet, how they can dance.

 

No time to wait till her mouth can

Enrich that smile her eyes began.

 

A poor life this is if, full of care,

We have no time to stand and stare.

 

W. H. Davies- Source Wikisource

 

Though these words were written more than 100 years ago, I still find them relevant in today’s society. Cast your cares aside and create some time for yourself. Enjoy some leisure activities. Start noticing the environment and the people around you and live a healthy lifestyle.

“In the midst of a busy life don’t forget to live.”
― Marty Rubin

Have a nice weekend!

What makes companies in one country so much more productive than in another?

In the 1950s, Ghana was twice as rich as South Korea. By 2011, the most recent year for which data is available, South Korea’s income was more than ten times higher than Ghana’s.

Yet these differences in productivity between the overall economies of the two countries are modest compared with the differences that appear to exist in the productivity of their manufacturing firms. My colleague Simon Baptist and I set up such a comparison and were surprised by the size of these differences.

You could argue that rich countries simply have more resources so their companies are bound to be more productive – or have higher levels of output per worker. But my research suggests that this is not the answer.

The surveys covered the main sectors within manufacturing, textiles, garments, furniture, food and electrical goods. While the sectors are the same, clearly the type of firms within them will be very different across the two countries.

Median output – the amount of garments or furniture produced per employee – is nearly 20 times higher in South Korean manufacturing firms than in Ghanaian ones. Whereas in South Korea the median worker produces US$193,000 of output a year, the comparable number in Ghana is US$10,000.

If you look at this in terms of the value added to the products by the worker, the differences are even larger: the average Korean worker produces US$117,000 and a Ghanaian worker only US$3,000, nearly 40 times less in terms of added value. The Ghana data comes from a panel survey of the country’s manufacturing firms over the period from 1991 to 2003 and the South Korean data is for the period 1996-1998.

Making use of what you put in

In our search for the source of that difference, we identified three factors. First, the amount of capital the firms employ; second, the importance of education and, third, the differences in the underlying efficiency with which the firms operate.

This concept of underlying efficiency is sometimes called “total factor productivity” and can be thought of as how much more effective a firm is at using all of its inputs – such as its capital and labour – than other firms. Most economists think differences in underlying efficiency are the most important reason for the large differences we see across countries and also across firms.

At first sight that also appears to be the case in our comparison of Ghanaian and Korean firms. In the first graph below, the vertical axis shows output per labour hour and the horizontal axis, capital per labour hour. The key point in the figure is the distance between the two lines, which measures the average differences in the efficiency with which firms in the two countries use capital and labour.

Labour productivity on capital per labour hours
Author provided

While there is some overlap, showing that some Ghanaian firms are as efficient as Korean ones, on average the differences are large. The chart implies that, on average, Korean firms produce six times more output with the same capital and labour as Ghanaian ones. That is one measure of underlying productivity.

The importance of education

Yet, the chart omits the possible role of education. When we included education in our analysis we find that its impact on output was massively larger in Korea than in Ghana.

The second graph below shows how education affects output per labour hour: the green line shows the effect for South Korea, the blue line the effect for Ghana. Most firms employ a workforce that have had on average between five and 15 years of education. Over this range, output per labour hour in South Korea increases dramatically; but for Ghana it scarcely changes.

How does education increase labour productivity?
Author provided

This analysis implies that all the differences in productivity across the two countries can be explained by how much more effective education is at increasing output in South Korea than it is in Ghana.

It is very hard to show whether these changes in education actually cause the differences seen in the chart. But it is clear that something associated with education is having very different effects in the two countries.

A quality controller at a South Korean mobile phone component plant.
Kim Hong-Ji/Reuters

Several possible explanations suggest themselves. The first and most obvious is that the quality of education differs across the countries. A second possibility is that human and physical capital are being combined in fundamentally different ways in the two countries.

Take a simple example: a machine operator in South Korea operating a robot to produce garments may have the same number of years education as a machine operator in Ghana operating an electrical sewing machine. Even allowing for the substantial differences in capital – between a high-tech robot and a sewing machine – it is still very possible that one can be five times as productive as the other.

A third possibility is that the quality of the management is the key difference. Recent research, provides some evidence that poor management may explain low productivity within firms, although further research is needed to explain how management is linked to the uses made of educated labour.

Taken together these explanations imply that while the quality of education makes a massive difference to manufacturing output in South Korea, it would be a mistake to think that investing in education alone is the answer to increasing productivity. It’s important to also consider the quality of that education, the technology the firms are able to employ cost-effectively, and the quality of the management.

The Conversation

Francis Teal, Research Associate, Centre for the Study of African Economies, University of Oxford

This article was originally published on The Conversation. Read the original article.