Power of Productivity

Another book we discussed in our Senge Group was "The Power of Productivity" by the head of McKinsey Global Research Group.   This group researched productivity using Gross Domestic Product (GNP) per capita and the general measure. They discovered early in their research around 1992 that contrary to popular opinion the USA was not losing the productivity battle and was 25% better than the Japanese. 

They did find that the Japanese Auto Industry was more productive that the USA but the overall productivity was higher in the USA.  They discovered that a big factor in the productivity of any economy was the service economy.  Service economy employed 60% or more of the people and thus was a major influence on the productivity.  Agriculture, they said, should employ about 5% of the work force but in many underdeveloped countries is was 80%. 

Another big factor in the service economy was the way that business was done.  In Japan, houses are not built to standards and in large developments, but each one is custom and very small.  The result is a very expensive house.  There were many examples in Japan of very unproductive practices and regulations. 

I refer back to a previous post on this subject that gives additional information;


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