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Government urged to address “entrepreneurial complacency”

Monday, 12 November 2012 | By Michelle Hammond

Australia’s productivity decline is the result of “entrepreneurial complacency”, according to a new report, which highlights the need for government to support innovation among businesses.

 

The report, titled Understanding Australia’s Productivity Choice, was compiled by the McKell Institute in conjunction with the University of Technology, Sydney.

 

The report examines the slowdown in Australia’s productivity, and provides a number of recommendations aimed at boosting productivity growth.

 

One of the reasons for the decline in productivity, the report suggests, is “entrepreneurial complacency”, partly due to rising terms of trade.

 

However, innovative businesses are twice as likely to report increased productivity compared with businesses that don’t innovate, highlighting the need to boost innovation.

 

“Government has an important role in providing a policy framework for innovation,” the report said.

 

“The policy environment should encourage new business models and new firm entry without the ‘excessive competition’ that can lead to fragmentation of industry sectors and supply chains.”

 

“Global competitive advantage will be enhanced by innovation clusters and precincts.”

 

The report comes on the back of the latest Ernst & Young Australian Productivity Pulse, which found the level of productivity in workplaces has lifted the “national productivity range” from 7.25 to 7.58 in the past six months.

 

The Productivity Pulse is based on a survey of more than 2,100 employees spanning seven industries, and from all levels within organisations across both the private and public sectors.

 

Nearly two in five (38%) of the workers surveyed reported an increase in their productivity compared to six months ago.

 

“We’re producing more from the same amount of hours worked,” Ernst & Young Oceania advisory leader Neil Plumridge said in a statement.

 

“While it mightn’t sound like a lot, this is indeed a significant change in a short period given we’ve been operating in a declining productivity environment for the past decade or so.”

 

“An extra 15 minutes of productive time day every day at work can mean a great deal to individuals as well as the organisations they work for.”

 

The report identifies the key characteristics of four types of workers:

 

1. Super achievers (32% of workforce)

 

Workers in this “highly productive” group are most likely to be satisfied with their jobs and are highly motivated. They believe their skills are well utilised.

 

Personal productivity is extremely important to them. Only 9% of their day is wasted.

 

2. Solid contributors (49% of the workforce)

 

While productive, this group wastes 15% of their day and more time than average on IT issues, social media, and sending and replying to emails.

 

They are also almost twice as likely as super achievers to spend time doing manually what could have been automated.

 

3. Patchy participants (14% of the workforce)

 

This “less than productive” group is characterised by inertia and is responsible for most of Australia’s workplace wastage, wasting 16% of their day.

 

Despite consisting of Australia’s least satisfied or motivated workers, patchy participants are also the least likely to be planning to leave their organisation.

 

4. Lost souls (5% of the workforce)

 

This group wastes 21% of the working day. They are also the least likely to have flexible working conditions.

 

While 42% have not taken sick leave, 3% of this group has taken three months or more off due to sick leave. One in four is planning to leave their organisation.