Bend. Dig. Plant. Hoe. Harvest. Peel. Boil. This is the way generations of my half-starved Irish ancestors earned their living. Not one of their descendants farms potatoes.
Canada’s resource-rich provinces have growth opportunities, but prospects for Ontario’s manufacturing are more uncertain. The experts believe that increased productivity will enable us to maintain our standard of living and our civil society.
Of course productivity is the answer. Do you think my relatives, an assortment of administrators, athletes, lawyers, massage therapists, realtors, stock brokers and teachers would be willing to return to nineteenth century Irish-style potato production? It is horrible to contemplate. Half an hour would be too much.
But going forward is not easy either. For example, assume an Ontario potato farm achieving maximal pounds per acre with the work of five people. Farmers and farm experts may not be able to further increase crop yield, but information technology can increase labor productivity. Suppose a system could be purchased for $1 million, permitting the operation to be staffed by four people rather than five. Is this a good investment?
The experts may think, “Yes, this is just the ticket for Ontario.” Their idea is a problematic business proposition, barely earning the cost of capital. Moreover, short staffing could overwork the team and severance would be expensive for the employer. Potato farming is now a creative profession demanding technical expertise – the dismissed might not find other employment and their skills would be wasted.
Where corporations are very large, information technology is scalable. There is a very good business case for spending $1 million to lay off 10 staff members. But one? Although the gurus may urge it, Ontario’s small-business leaders are too risk averse to jump off this cliff.
Our productivity solution is not going to look like a large-corporate approach. The systems that support the enterprises we work for – accounting, business education, consulting, commercial law, government expenditure, regulation, tax policy, transport, and utilities – have more potential for efficiency gains than direct labor.
Canadians may not have the scale economies to enable our workers to be as productive as U.S. workers, but we can improve our organizations. Intensification of value-added activity may not be feasible, but subtraction of value-negative, unproductive procedure is always an opportunity.
In the future, we may look back on to-day’s organizational rigidities and feel about them the way I feel about nineteenth century Irish potato farming. Yucch. Or we may cling to what we think we know how to do and hate change. Attitude counts and will make the difference to our standard of living and our civil society.