Template-type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The ninth issue of the International Productivity Monitor published by the Centre for the Study of Living Standards contains six articles. Topics covered are: the magnitude of the Canada-U.S. productivity gap at the industry level; productivity puzzles facing researchers; the link between technology use, human capital, productivity and wages; the effect of organization innovation and information and communications technologies on firm performance; the effect of adjustment costs on aggregate productivity in Canada; and the role of micro-institutions in fostering productivity growth and reducing poverty in developing countries. Classification-JEL: O47, O51, O32, L80, C82, I30, O12 Keywords: Canada, United States, Productivity, Labour Productivity, Productivity Growth, Information Technology, ICT, Organizational Change, Human Capital, Firm-level, Innovation, Adjustment Costs, Peru, Institutions, Comedor, Poverty, Poverty Reduction Journal: International Productivity Monitor Pages: 1-2 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/overview-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/overview-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:0 Template-type: ReDIF-Article 1.0 Author-Name: Someshwar Rao Author-Email: rao.someshwar@ic.gc.ca Author-Name: Jianmin Tang Author-Email: tang.jianmin@ic.gc.ca Author-Name: Weimin Wang Author-Email: wang.weimin@ic.gc.ca Title: Measuring the Canada-U.S. Productivity Gap: Industry Dimensions Abstract: A key objective of economic policy in Canada is to reduce the productivity gap with the United States. The development of appropriate policies to attain this goal requires a thorough understanding of the nature of the gap, including its industry dimensions. Unfortunately, statistical agencies do not currently produce estimates of Canada-U.S. productivity gaps by industry. To fill this data lacuna, Someshwar Rao, Jianmin Tang, and Weimin Wang of Industry Canada in the first article present benchmark estimates of the Canada-U.S. labour productivity and total factor productvity gap for 29 industries for 1999 and extend the industry estimates back to 1997 and forward to 2001. They report that in 2001 output per hour in the business sector in Canada was 82 per cent and total factor productivity was 87 per cent of the U.S. level. Lower capital intensity was responsible for about 30 per cent of the business sector labour productivity gap. Three of four major sectors in Canada had a labour productivity level below its U.S. counterpart – manufacturing (80 per cent), the service sector (81 per cent), and primary industries (87 per cent) – while the level of labour producivity in the construction industry was well above that in the United States (129 per cent). Within manufacturing, the largest productivity gaps were found in electronic and electrical products, fabricated metal, and machinery and computers. Within the service sector, finance, insurance and real estate and information and cultural industries had particularly large productivity gaps. In contrast, labour productivity levels in a number of Canadian natural resource industries exceeded U.S. levels. Classification-JEL: O47, O51, C82, D24, J24 Keywords: Productivity, Productivity Levels, Canada, United States, Productivity Gap, Purchasing Power Parity, Industry, Industry Level Journal: International Productivity Monitor Pages: 3-14 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/rao_tang_wang-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/rao_tang_wang-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:1 Template-type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Ten Productivity Puzzles Facing Researchers Abstract: Puzzles intrigue and motivate researchers and focus research effort, and the productivity area is fortunate in having many unresolved issues. In the second article, Andrew Sharpe of the Centre for the Study of Living Standards puts forward and briefly discusses what he sees as the ten most important productivity puzzles facing researchers in Canada and in other countries. In terms of the international puzzles, he considers the causes of the post-1973 productivity slowdown that affected virtually all industrial countries the grand daddy. He also identifies the post-2000 productivity growth acceleration in the United States, labour productivity levels in a number of European countries that exceed U.S. levels, and the absence of a post-1995 productivity growth acceleration in Europe as developments that are currently not well understood. In terms of productivity puzzles related to Canada, he identifies the considerable difference in labour productivity growth in the non-business sector between Canada and the United States as a topic meriting investigation. He also sees the Canada-U.S. productivity gap and Canada’s relatively low machinery and equipment capital intensity as puzzles meriting in-depth research. Classification-JEL: O47, J24, D24, O51, O57 Keywords: Labour Productivity, Productivity, Productivity Growth, Investment, Information Technology, Information and Communication Technologies, Canada, United States, Acceleration, Productivity Growth Acceleration, Puzzles, Post-1973 Journal: International Productivity Monitor Pages: 15-24 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/sharpe-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/sharpe-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:2 Template-type: ReDIF-Article 1.0 Author-Name: Julie Turcotte Author-Email: turcotte.julie@fin.gc.ca Author-Name: Lori Whewell Rennison Author-Email: rennison.lori@fin.gc.ca Title: The Link between Technology Use, Human Capital, Productivity and Wages: Firm-level Evidence Abstract: Arguably the most important development in the Canadian workplace in recent years has been the massive introduction of information and communications technologies (ICT). The impact of this development on a range of variables, including productivity and wages, are manifold, but are still poorly understood. Julie Turcotte and Lori Whewell Rennison of Finance Canada examine the effects of education, training and technology use on productivity and wages at the firm level. They make innovative use of Statistics Canada’s Workplace and Employee Survey, which allows the linking of the characteristics of workers in a firm to firm performance measures. They find that productivity is higher: the more intensively technology is used in the firm; the greater the proportion of university educated workers; the greater the participation of workers in formal training programs; the greater the proportion of workers who receive computer training; and the greater the firm’s export orientation. A key finding with important policy implications is that computer skills training can augment the qualifications of lower-skilled workers and consequently boost firm productivity. Classification-JEL: O32, J24, L80, M53, O51 Keywords: Human Capital, Productivity, Firm-level, Wages, Training, Information and Communication Technology, ICT, Workplace and Employee Survey Journal: International Productivity Monitor Pages: 25-36 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/turcotte_rennison-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/turcotte_rennison-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:3 Template-type: ReDIF-Article 1.0 Author-Name: Surendra Gera Author-Email: gera.surendra@ic.gc.ca Author-Name: Wulong Gu Author-Email: wulong.gu@statcan.ca Title: The Effect of Organizational Innovation and Information and Communications Technology on Firm Performance Abstract: A key lesson from the U.S. literature on the impact of ICT on productivity is that ICT can only be effective if appropriate organizational structures are in place. This article by Surendra Gera of Industry Canada and Wulong Gu of Statistics Canada provides Canadian evidence to support this view. Using the Workplace and Employee Survey, the authors find evidence that firms that implement organizational changes and introduce ICT have a higher incidence of productivity improvement, increased sales and profits, and product and process innovation than firms that do not follow this path. Their findings suggest that to be successful firms typically need to adopt ICT as part of a system or cluster of mutualy reinforcing organizational approaches. Classification-JEL: O32, J24, D24, L80, M53, M12, O51 Keywords: Productivity Growth, Productivity, Information and Communication Technologies, Information Technology, Firm-level, Firm Performance, Human Capital, Training, Management Practices, Organization, Organizational Change, Organizational Innovation, Process Innovation, Innovation Pages: 37-51 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/gera_gu-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/gera_gu-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:4 Template-type: ReDIF-Article 1.0 Author-Name: Danny Leung Author-Email: dleung@bankofcanada.ca Title: The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data Abstract: Danny Leung of the Bank of Canada provides support for the hypothesis that organizational change is a necessary condition for the full realization of the productivity gains associated with ICT. Using aggegate data, the author finds econometric evidence that the impact of computer investment is not fully realized until three years after the initial investment. Firms appear to need a learning period during which they make the necessary adjustments to their organizational structures in order to benefit from the productivity-augmenting potential of ICT. One implication of this analysis is that despite the current lull in investment, productivity growth in Canada should continue to remain fairly robust as firms continue to integrate new technologies into their production processes. Classification-JEL: O51, O47, D24, O32, M11 Keywords: Organizational Change, Productivity, Productivity Growth, Multifactor Productivity, Information Technology, Information and Communication Technologies, ICT, Investment, New Technology Journal: International Productivity Monitor Pages: 52-61 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/leung-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/leung-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:5 Template-type: ReDIF-Article 1.0 Author-Name: Pierre-Olivier Pineau Author-Email: ppineau@uvic.ca Title: Productivity to Reduce Poverty: Study of a Micro-Level Institution in Peru Abstract: A Peruvian community-based organization, a comedor popular (communal kitchen), is studied in this article to show how, as a micro-level institution, it fosters productivity in order to reduce poverty. The concepts of institutions, productivity and poverty are reviewed to establish a framework of analysis, where institutions are linked to productivity and poverty. This framework is applied to a comedor the author visited in 2001 and 2003. Through the diversity and intensity of the comedor’s activities and the practices it instills in women working there, productivity leads to key poverty reductions. The analysis illustrates how material well-being, psychological well-being, access to infrastructure and capacity to manage assets (the four dimensions of poverty) benefit from the various productivity improvements. The findings of this paper call for a better mix of poverty reduction strategies, where macro and micro institutions are used to fight the multidimensional problem of poverty. Classification-JEL: O54, J24, I31, I32, I38, O12 Keywords: Institutions, Micro Institutions, Poverty Reduction, Poverty, Productivity, Comedor, Comedor Popular, Communal Kitchen, Peru Journal: International Productivity Monitor Pages: 62-75 Volume: 9 Year: 2004 Month: Fall File-URL: http://www.csls.ca/ipm/9/pineau-e.pdf File-Format: Application/pdf File-URL: http://www.csls.ca/ipm/9/pineau-f.pdf File-Function: version en français File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:9:y:2004:6