Productivity, Capital-Intensity and Labour Quality at Sector Level in New Zealand and the UK

Understanding productivity performance is important to informing policy advice on how to improve productivity and therefore New Zealand's overall economic performance. Given data limitations inherent in international productivity comparisons, this paper is not intended to inform policy in isolation but forms an important element of a wide and expanding body of evidence on the performance of the New Zealand economy. Previous international productivity comparisons involving New Zealand have been confined to the aggregate economy or to broadly-defined sectors such as manufacturing. This paper reports on a New Zealand-UK comparison which distinguishes 21 different ‘market sectors’ (ie, excluding public administration, education, health, property services and some personal, social and community services). It confirms the prevailing consensus that, in aggregate, New Zealand market sectors compare unfavourably with the UK on average labour productivity (ALP) - and by implication compare even more unfavourably with other countries such as the US. However, beneath this overall story there is considerable sectoral variation. While some NZ sectors out-perform the UK on ALP and/or multi-factor productivity (MFP), there is a large group of sectors which fall short of the UK on both productivity measures. Most of these low-productivity sectors are relatively low in physical capital-intensity compared to the UK. Overall, roughly a quarter of the New Zealand-UK gap in ALP for aggregate market sectors in 2002 was attributable to differences in employment structure such as the relatively high shares of New Zealand employment in comparatively low value added sectors such as agriculture. The remaining three quarters of the ALP gap were accounted for by within-sector productivity differences.productivity, capital-deepening, human capital

The Impact of Skills on Relative Productivity Performance at National Level: Exploring Channels of Influence

Given the widespread emphasis on the importance o f increasing workforce skills in order to enhance productivity performance, it is perhaps surprising that the evidence on the contribution of human capital to inter-country differences in productivity performance is still mixed. Yet this is certainly the case. This paper argues that two main reasons why some studies fail to find a strong role for skills in explaining relative productivity performance at national level are difficulties in measuring skills adequately and failure to take account of the mechanisms or channels of influence by which skills may exert indirect effects on productivity. Examples of such channels of influence include the complementarities of skills with other production inputs and the contributions made by skilled workers to knowledge generation and exchange and to innovation processes. However, the paper cautions that, in any single country, increases in measured skills may indeed have no effect on relative productivity performance unless those skills are well matched to employer requirements and are effectively utilised within firms and other organisations

Raising sector skills levels : how responsive is local training supply?

This UK study examines the extent and nature of any mismatches between the training requirements of employers and the local provision of vocational education and training (VET). Companies in selected sectors (maintenance and repair of motor vehicles; telecommunications services; mechanical engineering, vehicles and other engineering; and textiles, clothing and footwear manufacture) and regions were surveyed on their training requirements. Staff in colleges and training providers in the same regions were interviewed to discuss the survey findings and to investigate the extent to which these providers are already satisfying those requirements and the nature of any constraints which may be present

A post-mortem of regional innovation policy failure : Scotland's Intermediate Technology Initiative (ITI)

Brown R., Gregson G. and Mason C. A post-mortem of regional innovation policy failure: Scotland's Intermediate Technology Initiative (ITI), Regional Studies. The Intermediate Technology Initiative (ITI) was one of the most ambitious ‘systemic’ regional innovation policy instruments developed in the UK in recent years. However, little of the ITI's anticipated outputs materialized and the programme was prematurely terminated. This paper examines the reasons for its failure, which largely centred on the programme's inappropriate design. The findings suggest that greater recognition needs to be given to the specificities of local entrepreneurial ecosystems when designing, aligning and executing systemic innovation policy instruments. It is argued that paying greater attention to policy failures could potentially help innovation scholars better understand how innovation systems function.PostprintPeer reviewe

The Impact of Skills on Relative Productivity Performance at National Level: Exploring Channels of Influence

Given the widespread emphasis on the importance o f increasing workforce skills in order to enhance productivity performance, it is perhaps surprising that the evidence on the contribution of human capital to inter-country differences in productivity performance is still mixed. Yet this is certainly the case. This paper argues that two main reasons why some studies fail to find a strong role for skills in explaining relative productivity performance at national level are difficulties in measuring skills adequately and failure to take account of the mechanisms or channels of influence by which skills may exert indirect effects on productivity. Examples of such channels of influence include the complementarities of skills with other production inputs and the contributions made by skilled workers to knowledge generation and exchange and to innovation processes. However, the paper cautions that, in any single country, increases in measured skills may indeed have no effect on relative productivity performance unless those skills are well matched to employer requirements and are effectively utilised within firms and other organisations

Sources of Labour Productivity Growth at Sector Level in Britain, 1998-2007: a Firm-Level Analysis

This article focuses on the sources of labour productivity at a disaggregated sector level using a range of methods for decomposition, including the dynamic Olley-Pakes decomposition method introduced by Melitz and Polanec (2015) which offers an alternative approach to the standard dynamic decomposition developed by Foster, Haltiwanger and Krizan (2001). Our findings indicate that at the firm level, entry and exit played a relatively minor role in improving labour productivity growth in Britain between 1998-2007, although this masks a great deal of variability in the performance of entrants and exitors. A much more significant contribution to labour productivity throughout the period was achieved through the market share growth of incumbent firms with above average productivity. The interpretation of findings is sensitive to underlying assumptions and the approach adopted