LETTER OF THE DAY - Education must yield higher productivity
Published:Friday | February 15, 2013 | 12:00 AM
THE EDITOR, Sir:
In recent years, there has been a massive increase in the number of persons with advanced degrees. Investment in education has long been touted as the route to our success. Why then are we so poor? Why then do we have such a wide trade deficit? Why is our growth in GDP measured in tenths of a percentage point? At the organisational level, individuals with genuine leadership skills are scarce, despite a high count of MBAs.
We can debate whether the curriculum is in alignment with the current needs of a global environment. We can also assess attitudes of tertiary graduates - their willingness to see learning as lifelong and that attainment of a MBA is not the end-state.
I suggest that the current low level of productivity is a major deterrent to economic growth. The challenge for businesses is to develop cost models that deliver an acceptable return to the shareholder given the fact that the market, not the business, sets the price. Businesses must be able to produce at a cost that is below the level that the customer is willing to pay.
Each company needs to accurately know how its productivity measures up to the best in the industry. Generally, our output per hour worked lags that of our major trading partners. Improved automation has a positive impact on output per hour worked.
Critically, behaviours must change to optimise output per hour worked. When employees turn up late each day, are 'on the road' frequently, spend time on social media or quit early, then these all have a straight-line effect: lower output per hour, lower volume to spread the fixed costs over, and a higher unit cost. Consumers will not buy because it was made in Jamaica; they will buy when the product or service is at a price they will pay.
Next month, the CEO of Puma may likely visit Jamaica for Boys and Girls' Championships. Why can't we engage him to set up a manufacturing plant in Jamaica? We could market the shoes/gear with the slogan 'Worn by the fastest man on earth, built in the homeland of the fastest man on earth'. This idea may not materialise, because our output per hour work is well below countries that currently manufacture Puma gear.
Finally, I humbly suggest to the recent holders of advanced degrees that they actively take up the challenge to improve productivity at both the firm and country level.
PETER GRAHAM
Kingston