Robert Buddan

Productivity Week allows us the opportunity to look beyond the firm-based measures of labour productivity to broader and newer issues of development, and indeed, to a new economy. Today the development debate surrounds such concepts as the 'knowledge economy', 'micro-finance', 'nanotechnology', 'sustainable development', 'trade and development', 'governance', 'capacity development', 'culture and development', and so on. There is, however, little that brings all of these together.

One exception is new growth theory. It says that creativity is the most important factor of production. According to the old theory, the scarcity of land, labour, and capital determined what is produced (to meet demand) and at what price (to satisfy profit and supply). But many of these factors of production are not really scarce but under-utilised. The new theory is that creative use of capital and labour makes both more productive by invention (new ideas) and innovation (new applications).

Firms, governments, and schools, can all increase their productivity through creativity, that is, ever finding new ways to improve their output and results. What is more, any one class, race or nation does not own creativity, nor is it scarce in nature. It is abundant and spreads easily. Rather than a law of diminishing returns, one benefits from a law of increasing returns.

Knowledge, ingenuity, discovery, science and technology, are all forms of creativity, and the wellspring of creativity is the human mind. Creative thinking is the basis for good research, organisation, operational procedures, production systems, human relations and governance, and applies to all of these in business, politics, academia, school, justice, crime fighting, and other aspects of human society.

CREATIVE ECONOMY

Creative economy is not just a buzzword. One of its leading academic formulators won the Nobel Prize in 1987. It was a feature story in a special issue of the prestigious Business Week of 2000. The EU held a conference on creative economy in 2005. Gordon Brown, Britain's finance minister and the man most likely to succeed Tony Blair, is a supporter of new growth theory. It is the theory behind the knowledge economy in which the power of the human mind becomes the most important factor of production.

Jampro was a major sponsor of a conference on the creative economy in March 2006. That conference defined the creative economy as "the cycle of creation, production, and distribution of goods and services that uses knowledge, creativity and intellectual capital as primary inputs". Addressing the World Summit on the Information Society in 2003, Minister Phillip Paulwell pointed out that Jamaica's ICT policy was the platform for a new kind of economy.

He said, "ICT has tremendous potential for transforming old economy industries; for giving new life to manufacturing; for vastly improving the services sector and for increasing value-added and productivity in agriculture. Increasingly, ICT applications are enhancing and supporting education, health care, the environment, public administration and poverty reduction".

KNOWLEDGE AND TECHNOLOGY

E-commerce (Tradepoint) and e-governance (government websites) give some indication of how people, using knowledge and technology, can serve themselves better. Knowledge and technology combine in the software and the software creates intelligent operation. The National Housing Trust is an intelligent organisation. I recently applied for my NHT refund online, filled out a simple form, received an automated response in a second telling me that I would receive my cheque in 14 days. I happened to be at the post office on that 14th day and was handed my cheque.

The former Jamaica Adult Literacy Programme (JAMAL) has now been repositioned as the Jamaica Foundation for Lifelong Learning, another indication that the information society and knowledge economy demand constant re-education. After all, if mind power is the most important factor of production, it must be constantly refined and re-educated just as factories must be retooled.

I wonder, for instance, if Jamaican corporations require their executives to take learning seminars periodically to upgrade and stay abreast of new ideas, practices and innovations, much as medical doctors have to do, and as public sector managers do at the Management Institute for National Development (MIND). The Private Sector Organisation of Jamaica (PSOJ) has just completed its code of corporate governance. Much of it is understandably about transparency and accountability.

It might consider requiring the executives of listed companies, at least, to comfort their shareholders in the knowledge that corporate executives are keeping in touch and trying to stay ahead of global competition with new ideas and innovations in productivity; and to put on similar lifelong seminars for their workers. Many countries are in fact planning to establish creative economy agencies to spread knowledge and innovation. The PSOJ should look into this.

INCREASE THE VALUE OF HUMAN CAPITAL

It should not be above Michael Lee Chin, Douglas Orane, Beverly Lopez, Doreen Frankson, and others to attend these seminars with their workers, both as students and lecturers, and share what they know about how to increase the value of human capital, which in turn, would translate into increased productivity.

The old economic thinking might raise the question, what about interest rates? The old model of scarcity determines interest rates. The new model involves innovating means of reducing interest rates by creative solutions and some of the more promising experimentations involve micro-financing. What about crime and violence then? The police accredit Jamaica's success in reducing murders to improved intelligence. The new fingerprint machine can process a fingerprint in seconds and search a database in five minutes. That system of intelligence combines the creative use of knowledge with technology and stored information.

What about workers' attitudes? Granted, this is not always an easy one, but company seminars on lifelong learning will help. Good workers tend to go with good managers. Arnold Kransdorff has sent me a preview of his new book, Corporate DNA, in which he also argues that intellectual capital and organisational learning are key factors of production that lead to productivity gains. Management that learns is good management.

INNOVATION VS IMITATION

Creativity is, by definition, innovativeness. Yet, Jamaican society has sometimes been criticised for imitativeness. This is not altogether fair since many of our creative industries, mainly cultural industries, are homegrown and distinct. In fact, many others try to imitate us. But it does seem that many of our formal private and public sector institutions imitate ideas and designs. There is so much room for innovation that invents and customises to attract new markets under Brand Jamaica. Imagination is not a scarce commodity.

Productivity Week is important to focus attention on the need to increase output. One solution might be to link labour productivity with wages. But in today's world, the whole firm must learn globally, learn continuously and learn together. Innovation through science and technology is vital. The new revolution in S&T surrounds biotechnology and nanotechnology (molecular manufacturing). Both have tremendous promise for creating profoundly new ways and means for electronic, health, water, energy, construction, and fabric industries.

Jamaica's National Commission on Science and Technology says that more companies must establish research and development departments, build a pool of S&T professionals, and get the private sector more involved. Indeed, Productivity Week must begin a process of looking 20 years down the road and catch the train now if we are to have a new 21st century approach to productivity and growth.

Robert Buddan is a lecturer in the Department of Government at the University of the West Indies. You can send your comments to robert.buddan@uwimona.edu.jm.