If working smarter comes from new ideas,

get it? Economic growth does not come primarily from cutting down trees or digging things out of the ground. What scientists are telling us is correct and we need to reduce the destruction of our ‘natural capital’, the environment. Think of ways to produce more with less resources.

That’s why the report says increased productivity is “the key to prosperity” and is based on “the spread of new and useful ideas.”


More specifically, by people thinking about how to improve the goods and services we produce, how to make the production process leaner and more efficient, and by coming up with entirely new goods and services. , increase productivity.

This brings new products into the mix, improves quality and reduces costs.

Over the past 200 years since the start of the industrial revolution, productivity in all developed countries has increased by a few percentage points almost every year. In our case, the average Australian’s economic output has grown seven times hers over the past 120 years, but working hours have consistently declined.

The problem is that productivity miracles aren’t all that miraculous these days. Over the past 60 years, our productivity has increased at an average annual rate of 1.7%. Over the decade to 2020, it “decreased significantly” to 1.1% per annum.

If we try to go back to higher productivity gains, it is clear that we will come up with some new ideas about how to increase productivity in the service industry without compromising quality.

The report is quick to point out that the same thing is happening in all rich countries. (however, level Our productivity is lower than it is today compared to the levels achieved by other rich countries. )

This is important. This suggests that whatever factors caused the decline in productivity performance are probably the same as in other affluent economies. But so far no one has figured out the main cause of the problem.

If they’re still working on an answer, so are we.Therefore, the report focuses on thinking about what May The cause of the problem and where to look for the answer. Remember, this is just the first of several reports.

So unlike rent seekers and econocrats, we don’t offer magic answers. However, at least some of the productivity loss is well explained. For most of the last two centuries, one of the main ways we’ve produced more with less is through the use of newly invented “labor-saving equipment.” Replace workers in agriculture, mining, and manufacturing with machines.

We produce more commodities in these industries than ever before, but the number of people employed to produce them all is a fraction of what it once was. This is a big part of the productivity gains that have been achieved since federation.

By producing more with less, we get richer, not poorer. real Income – Total employment increased rather than decreased as we spent extra income to hire more people to provide all kinds of services from unskilled labor to highly skilled workers.

We (and all rich economies) have been so successful in shifting workers from manufacturing goods to providing services that service industries now make up about 80%, accounting for about 90% of all employment.


Can you see the problem? Basically, services are provided by people. That is why our current economy is almost entirely made up of industry, making it much more difficult to increase productivity simply by using machines to replace workers. Not impossible, but much harder than farms, mine sites, and factories.

All the more so when remembering that two of the largest service industries are health and social services and education and training.

If we want to go back to higher productivity gains, it is clear that we will come up with some new ideas about how to increase productivity in the service industry without compromising quality. It contains the following:

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If working smarter comes from new ideas,

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