Avia Collinder, Sunday Gleaner Writer

While worker performance is the most publicised aspect of our local productivity problem, experts say the use of outdated technology, poor management and a reluctance to invest in training are the more significant factors affecting productivity in local companies.

Research shows that from 1950 to 2000, Jamaica had a 1.5 per cent average annual rate of labour productivity growth, which indicates that it would take 47 years for output per worker to double. This, it is noted, is low when compared to the performance of Trinidad and Tobago, where labour productivity grew at an average annual rate of 3.1 per cent during the same period; and it would take 23 years for output per worker in that country to double. But the answer to increasing output, it appears, does not lie in the simply held view that workers should work harder:

Innovation

Executive director of the Jamaica Productivity Centre (JPC), Dr. Charles Douglas, states,

"The answer lies in the whole matter of technology adaptation and innovation. We are not doing a lot in that area. In Trinidad, they went through massive retooling and hence we see the kind of increase they have experienced. In the food and beverage sector, this has made tremendous impact."

According to Douglas: "The rate at which Trinidad spins off new products and develops better-quality goods has implications for the type of technology used and systems implemented. We (in Jamaica) have not given a lot of attention to our processes."

Locally, one company which has tried to bridge the technology gap is GraceKennedy. At its National Food Processors (NFP) plant, located in Temple Hall, St. Andrew, Chief Executive Officer Mrs. Dianne Robinson says significant increases in production on the soup line have been achieved through equipment change. "It was a sizeable investment. It was paradigm shift to say we were going to buy three pieces of equipment which would halve manpower requirement while increasing output. We now have the option of running all lines at the same time too."

Robinson observes: "A lot of people may not have seen it as significant, but it made a big impact. For us, the answer has not been to have workers work harder; we need to look at what we do and do it better."

Refocused

NFP, a wholly owned subsidiary of GraceKennedy, and now in its 40th year of operation, makes soup mixes, beverage crystals and instant porridges. The CEO notes that the company has refocused itself. It is also now doing food in its dried form as this has proven to be more beneficial than wet processing. Perhaps because of the high cost of local funding, not many other companies appear to be following the NFP strategy of investment in technology upgrading.

According to Douglas: "You go to some factories and you see them utilising technology that is more than a 100 years old. You cannot compete using these types of equipment." He notes that the problem could well be an issue of resources, observing the significant interest rate differential between Trinidad and Tobago (T&T) and Jamaica. Locally, manufacturers who wish to borrow are faced with rates in the 20s and 30s relative to single digits in T&T. Energy prices are also significantly different, with T&T manufacturers enjoying much cheaper rates. "We have two different macro-economic environments," the NPC head admitted.

Douglas points out that, alongside technology change, product quality improvement is another issue around which the JPC has had meetings with local producers. "In terms of quality, both in products and services, we have a far way to go. Quality has an impact on productivity; it determines demand. If quality is mediocre or poor, sales are likely to be less and therefore there is no point producing a product or service because it can't be sold. Among local manufacturers, he claims, "Poor quality is just a mindset. It's a mindset we have to get over. This requires public education."

Productivity

The JPC says Douglas has also been working with local firms in developing effective incentive schemes for workers. "Here at Productivity Centre, we have observed that wages are sometimes rising at a faster rate than productivity. If your wages are rising faster than output per worker, you are losing competitiveness. You want productivity to be rising faster than real wage rates. We think a productivity-linked wage system is the way forward." says Douglas.

Chief Executive Officer at the Job Bank, and psychologist, Dr. Leachim Semaj, says that in the area of labour and productivity, government policy must change. "We need to do research that enables projections on our economic direction. In tourism now, we are not ready for the future. In the next five years, construction workers with a higher degree of technical competence are needed. Many now are just able to mix cement. When construction of new hotels is finished, where will we find the hospitality workers?

austanny@yahoo.com