By XN Iraki
What is the secret behind the rise of the Asian Tigers and Western countries? While many will focus on leadership, the secret is rise in productivity.
The leadership ensured the available resources produced as much for the economy as was possible and waste was reduced to a minimum. Most recent economic stars shone under benevolent dictatorship.
Productivity and efficiency were forced down the throat of citizens. Paul Krugman, last year’s Economics Nobel Laureate observed that the Asian Tigers grew through perspiration not inspiration. In Kenya, it seems too many of us are waiting for inspiration.
Some Kenyans have argued that we missed a golden opportunity to transform this country economically by not harnessing Kanu’s monopoly on power to increase national productivity.
They argue that the present political interests are so diverse that it is unlikely we can all pull together in one direction and increase productivity. They give examples of the tiny Great Britain, which built an empire by being more productive - a gun was more ‘productive’ than several spears.
Rise of trade unions
Some boldly argue that we need a ‘strong hand’ to tame the national indiscipline where too many reap where they never sowed; where too many are unproductive.
The rise of trade unions may be seen as one form of indiscipline. Such unions distort the market leading to costly labour, which makes our country a very unattractive destination for investors. Corruption is the best form of indiscipline, where individuals or corporations make money by doing nothing, by being unproductive.
If productivity, doing more with less, is the secret behind economic growth, how do we increase it?
We must start by making it apart of our national culture. The many service charters I find in most firms are supposed to increase productivity by specifying time frames for service delivery. You cannot measure productivity without time frames.
Performance contracting
The greatest hindrance in productivity growth is not lack of technology as popularly believed; it is actually the human being, his culture often deeply ingrained and hard to change. Performance contracting has been another popular tool.
No matter how productive you are as an individual, you will eventually be slowed down by another unproductive individual. The policeman who stops you and wastes your 10 minutes and makes you late for your appointments is a good example. After all, you cannot create your own roads!
The culture is tied to our laws and regulations. Are they really productivity oriented? Those who have tried to get vital documents know how unproductive it can be. For example, why do we apply for birth certificates and national IDs? Why can’t the two processes be merged? Once I get a birth certificate, a computer program should automatically post my ID to the last address I gave once I turn 18. That should include my voter’s card too. The current initiative on e-government will hopefully makes such a dream a possibility.
Our laws and regulations should be system oriented. Currently there are too many centres that lead to empire building and sub-optimisation. For example, is the current organisation in the Government the most efficient and productive? What departments can be merged or separated? What activities can be removed or are redundant?
Focus on operations
To increase productivity, we need to focus more on operations. There has been too much emphasis on strategies, what needs to be done rather than how to do it.
The private sector has led the way with several companies now having the post of an operations director. By focusing on what the firm does, its activities across the supply chain, it becomes easier to identify the bottlenecks and reduce the costs and increase productivity. In the public sector such bottlenecks constitute the ‘toll stations’ where bribes are extracted.
National culture
One way to improve the operations is to use technology; from Internet to phones. By using M-pesa, you free your time to do more useful things and as a result you become more productive. By using LCD projectors and laptop computers, teachers and professors are more productive; they can teach more students and spend less time on the blackboard writing.
Technology becomes a better leverage for productivity when it is made part of the national culture, though a lot of people resist it for fear of being unmasked in their shady deals. Our leaders can lead by examples. President Obama carries his Blackberry while Rajiv Gandhi never left his laptop, and Obama is having a hard time forfeiting his Blackberry. Technology is spawned by our Research and Development (R&D). We must invest money to create innovations, to do it better than others. Importing technology all the time will make us more productive but followers. Though R&D is expensive, the returns are there for all to see.
Where would we be without the car, the Internet, the mobile phone or electricity? With time we become so used to technology that we often don’t bother to appreciate the role it plays in enhancing the national productivity – like being able to check KCSE results through sms.
The good news
R&D is often funded by the Government because of the risks involved: Only about three per cent of the patents are eventually commercialised. You cannot predict accurately which idea will be a success despite our advances in knowledge. In addition, there are lots of externalities in R&D and that would discourage individuals from pursuing research.
Where do we go from here?
Productivity often releases us from the drudgery of low standards of living. In all sectors, we must pursue greater productivity and build it in our socio-political systems. We can create more jobs through increased productivity. We can enjoy our lives more, and pursue our interests and leisure more. Wasn’t human slavery not replaced by technology, a more subservient and productive slave?
Countries that realised the secret behind productivity are way ahead of us. The good news is that we can catch up-hopefully in my lifetime.
The writer is a lecturer at the University of Nairobi School of Business. xniraki@aol.com
