Transcript: Canada's Lagging Productivity | Oct 15, 2015

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a black suit, white shirt, and striped gray tie. Behind him, a wall screen reads “The Agenda, with Steve Paikin.”

Steve says THE NOBEL PRIZE
WINNING ECONOMIST PAUL KRUGMAN
ONCE SAID, “PRODUCTIVITY ISN'T
EVERYTHING, BUT IN THE LONG RUN
IT'S ALMOST EVERYTHING.”
AND INCREASINGLY, SEVERAL
CANADIAN ECONOMISTS HAVE ALSO
RAISED CONCERNS ABOUT WHAT
CANADA'S LAGGING PRODUCTIVITY
LEVELS MEAN FOR OUR OVERALL
ECONOMIC WELL-BEING.
ARE THE LEADERS TALKING ABOUT
THIS DURING CAMPAIGN 2015?
BARELY.
SO WE WILL HERE:
IN THE NATION'S CAPITAL, HERE'S:
DON DRUMMOND,
STAUFFER-DUNNING
FELLOW AT QUEEN'S UNIVERSITY'S
SCHOOL OF POLICY STUDIES;
AND ANDREW
SHARPE,
EXECUTIVE
DIRECTOR OF THE CENTRE FOR THE
STUDY OF LIVING STANDARDS;

Don and Andrew appear on screen in a studio in Ottawa. Don is in his early fifties, clean-shaven and balding. He’s wearing glasses, a cream suit, white shirt, and striped black tie.
Andrew is in his late fifties, with gray hair and a full white beard. He’s wearing a gray suit, white shirt, and silver tie.

Steve continues AND WITH US IN STUDIO:
GLEN HODGSON,
SENIOR
VICE-PRESIDENT AND CHIEF
ECONOMIST WITH THE CONFERENCE
BOARD OF CANADA.

Glen is in his late forties, clean-shaven, with short gray hair. He’s wearing a gray suit, blue gingham shirt, and burgundy checked tie.

Steve continues IT'S GOOD TO WELCOME DON AND
ANDREW BACK TO OUR PROGRAM IN
THE NATION'S CAPITAL.
GLEN, LOVELY TO HAVE YOU HERE AS
WELL.
I WANT TO SHARE SOME NUMBERS --
THESE ARE YOUR NUMBERS, GLEN, SO
YOU WILL BE WELL AWARE OF THEM.
IF CANADA'S LABOUR PRODUCTIVITY
HAD MATCHED THAT OF THE UNITED
STATES BETWEEN THE YEARS 1988
AND 2008, HOW WOULD OUR LIVES BE
DIFFERENT?
WELL, HERE'S HOW.

A slate appears on screen, with the title “If only...”

Steve reads from the slate and says
REAL GDP PER CAPITAL IN THE
COUNTRY WOULD HAVE BEEN 8,500 dollars
HIGHER.
PERSONAL DISPOSABLE INCOME WOULD
HAVE BEEN 7500 dollars HIGHER.
CORPORATE PROFITS WOULD HAVE
BEEN 40 percent HIGHER.
FEDERAL GOVERNMENT REVENUES
WOULD HAVE BEEN UP BY A THIRD
ALMOST.
CONFERENCE BOARD NUMBERS.
GLEN, STARTING WITH YOU.
JUNE PAST YOU WROTE A PIECE IN
WHICH YOU PREDICTED CANADA'S
LAGGING PRODUCTIVITY WOULD NOT
BECOME AN ISSUE DURING THE
FEDERAL ELECTION CAMPAIGN.
CAMPAIGN'S ALMOST OVER.
WOULD YOU RIGHT?

A caption appears on screen. It reads "Glen Hodgson. The Conference Board of Canada."

Glen says I'M AFRAID SO.
I DO ECONOMIC FORECASTING FOR A
LIVING, STEVE, AND FRANKLY, THAT
WAS A FAIRLY EASY CALL BECAUSE
IT'S A REALLY HARD CONCEPT TO
EXPLAIN TO VOTERS EVEN AT THE
BEST OF TIMES AND AN ELECTION IS
PROBABLY NOT THE BEST OF TIMES
TO SELL A VAGUE CONCEPT LIKE
PRODUCTIVITY.

The caption changes to "Productivity Puzzle. Lagging along."

Steve says HERE'S A COUPLE OF
THE MENTIONS.
WE'LL SHARE THESE AS WELL.
THE NEW DEMOCRATS IN THEIR
PLATFORM MENTIONED PRODUCTIVITY
TWICE.
WE'LL BOOST ECONOMIC AND
PRODUCTIVITY OVER THE MEDIUM
RUN.
THE LIBERALS HAVE ONE MENTION.
STEPHEN HARPER'S FAILURE TO
INVEST HAS LED TO WORSENING
TRAFFIC CONGESTION, MAKING IT
HARDER FOR FAMILIES TO SPEND
TIME TOGETHER.
THIS GRIDLOCK ALSO COSTS OUR
ECONOMY BILLIONS OF DOLLARS IN
LOST PRODUCTIVITY EACH YEAR.
THE CONSERVATIVES' PLATFORM.
THE WORD PRODUCTIVITY DOES NOT
APPEAR IN THE CONSERVATIVE PARTY
PLATFORM.
DON, IT DOESN'T APPEAR AS IF ANY
OF THE THREE MAIN PARTIES ARE
TAKING MUCH OF AN INTEREST IN
THIS ISSUE OF PRODUCTIVITY
DESPITE THE NUMBERS WE JUST
SHOWED AND I WONDER IF YOU HAVE
ANY THEORIES AS TO WHY THAT IS.

The caption changes to “Don Drummond. Queen’s University.”

Don says YEAH, SURE.
THERE'S TWO OBVIOUSLY REASONS.
THE FIRST ONE IS -- AND I'D GO
EVEN FURTHER THAN WHAT GLEN SAID
ABOUT IT BEING DIFFICULT TO
EXPLAIN.
THE GENERAL PUBLIC HAS
ABSOLUTELY THE WRONG IDEA WHAT
PRODUCTIVITY IS.
MANY FOCUS GROUPS AND SURVEYS
HAVE BEEN DONE AND THE MAJORITY
VIEW OF PRODUCTIVITY MEANS WORK
HARDER FOR LESS PAY.
IN OTHER WORDS, EXACTLY THE
OPPOSITE OF WHAT IT'S SUPPOSED
TO MEAN.
I GUESS WHETHER YOU SHOULD TAKE
THAT ON AND TRY TO CORRECT
PUBLIC OPINION, BUT GOVERNMENTS
TEND TO ABANDON IT.
AND SECONDLY IT'S NOT ALL THAT
OBVIOUS THE LEVERS TO PULL.
WE SAID GOVERNMENT SHOULD DO TO
INCREASE PRODUCTIVITY HAVE BEEN
DONE IN SOME FORM AND THE
PRODUCTIVITY GROWTH RATE DIDN'T
GO UP.
SO THE MOMENT YOU START GETTING
INTO A DEBATE IN AN ELECTION
PERIOD OR OTHERWISE, YOU'RE INTO
A LONG CONVERSATION WHICH IS
VERY DIFFICULT TO CONVEY TO
PEOPLE.
SO THEY TEND TO STEER AWAY FROM
IT.
I CAN ACTUALLY TELL YOU, THERE'S
A GLOBAL EDIT FUNCTION IN
GOVERNMENT DOCUMENTS.
THE WORD DOES NOT APPEAR IN ANY
FEDERAL GOVERNMENT DOCUMENTS FOR
MANY YEARS.
I DON'T KNOW IF ANYBODY DOESN'T
HAVE THE DISCIPLINE TO WRITE IT.
I SUSPECT THEY HAVE A SOFTWARE
FUNCTION THAT SEARCHES FOR IT
AND TAKES IT OUT.

Steve says LET'S FOLLOW UP ON
WHAT DON SAID.
WHEN PEOPLE COME TO YOU AND SAY
I KNOW WHAT PRODUCTIVITY IS, IT
MEANS YOU WANT ME TO WORK MORE
AND GET PAID LESS.
WHAT DO YOU SAY TO THEM?

The caption changes to "Andrew Sharpe. Centre for the study of living standards."

Andrew says I'M SAYING
THAT'S A MISLEADING CONCEPT OF
PRODUCTIVITY.
OVERALL, PRODUCTIVITY AT THE
TOTAL ECONOMY LEVEL DOES NOT
LEAD TO JOB LOSS.
IT GUARANTEES JOBS THROUGH
INCREASED COMPETITIVENESS.
PRODUCTIVITY IS A TRICKY
CONCEPT.
THERE'S DIFFERENT CONCEPTS OF
PRODUCTIVITY IN THE BUSINESS
COMMUNITY AND IN THE ECONOMICS
COMMUNITY.
ECONOMISTS, WHEN THEY TALK ABOUT
THAT THEORY, THEY'RE TALKING
ABOUT OVER TIME GROWTH IN REAL
OUTPUT PER WORKER.
BUSINESS PEOPLE WHEN THEY'RE
TALKING ABOUT PRODUCTIVITY
THEY'RE TALKING ABOUT CURRENT
VALUE OR OUTPUT PER WORKER.
THEY'RE NOT THE SAME CONCEPT AT
ALL.
OFTEN THERE'S A DISCONNECT
BETWEEN THE DEBATES IN THE
BUSINESS COMMUNITY AND
ECONOMISTS ON THE PRODUCTIVITY
ISSUE.

Steve says GLEN, WHEN YOU SAY
IT, WHAT DO YOU MEAN WHEN YOU
TALK ABOUT PRODUCTIVITY?

Glen says I TRY TO MAKE
IT SIMPLE.
I TALK ABOUT IT WORKING SMARTER
RATHER THAN HARDER.
WE CAN GET MUCH MORE COMPLICATED
THAN THAT.
WHEN I TALK TO BUSINESS AND
POLICY AUDIENCES I REALLY TRY TO
DRILL IT DOWN TO THE CORE
CONCEPTS: WORKING SMARTER.
GETTING MORE VALUE FOR EVERY
HOUR WORKED.
IT'S TOUGH.
IT'S A REALLY TOUGH SELL.

Steve says THE NUMBERS THAT WE
MENTIONED OFF THE TOP THERE ARE,
I GUESS THEY GO BACK TO 2008.
SO WE'RE A LITTLE BIT DOWN THE
ROAD FROM THEN.
HAVE THINGS CHANGED AT ALL SINCE
THEN?

Glen says ARGUABLY
THEY'VE GOTTEN WORSE.
OUR PRODUCTIVITY RATES HAVE BEEN
PATHETIC.
THE AMERICAN RATES ARE NOT VERY
GOOD BUT A LITTLE BIT BETTER
THAN OURS.
I HAVE A SLIDE THAT SHOWS OVER
THE LAST 15 YEARS U.S.
PRODUCTIVITY RATES ARE A
PERCENTAGE FASTER THAN CANADA.
ANDREW DID SOME OF THE ANALYSIS
FOR US GOING BACK A DECADE.
THINGS HAVE GOTTEN WORSE IN THE
LAST FOUR OR FIVE YEARS.
IF WE WENT BACK, WE WOULD HAVE
EVEN HIGHER NUMBERS THAN WHAT
YOU WERE QUOTING.

Steve says DON, YOU REFERRED TO
SOMETHING CALLED THE
PRODUCTIVITY PARADOX.
TELL US WHAT IS SO PARADOXICAL
ABOUT THE PRODUCTIVITY PARADOX?

The caption changes to "Who’s at fault?"

Don says WELL, I DID
THIS EXERCISE, I GUESS IT WAS
ABOUT 10 YEARS AGO, AND I LOOKED
BACK AT EVERYTHING EVERY
ECONOMIST IN CANADA HAD EVER
ADVISED ON PRODUCTIVITY, AND
DESPITE THE JOKE ECONOMISTS CAN
NEVER AGREE ON ANYTHING, WE'LL
SEE AT THE END OF THIS PROGRAM
HOW THE THREE OF US FARE, THERE
WAS ACTUALLY AN INCREDIBLY TIGHT
VIEW OF WHAT SHOULD BE DONE TO
ENHANCE PRODUCTIVITY, AND
STARTING OFF IN THE 1980s, IT
WAS BASICALLY ATTACKING THE
GENERAL MACROECONOMIC FRAMEWORK
POLICIES.
THERE WAS A LOT OF REASON TO
BELIEVE THAT WAS THE CULPRIT.
WE HAD INFLATION, HUGE PUBLIC
DEBT, HIGH TAX RATES ON CAPITAL,
INTERPROVINCIAL BARRIERS.
IT LOOKED LIKE A TERRIBLE RECIPE
FOR POLICY AT ATTRACTING
PRODUCTIVITY.
AND GUESS WHAT HAPPENED?
GOVERNMENTS, FEDERALLY AND
PROVINCIALLY, ATTACKED ALMOST
ALL OF THAT.
THEY DIDN'T DO THE ENTIRE
AGENDA.
WE STILL GOT INTERPROVINCIAL
TRADE BARRIERS, WE STILL HAVE A
CORPORATE TAX REGIME THAT
FAVOURS COMPANIES STAYING SMALL,
BUT WE DID AN AWFUL LOT OF THAT
AGENDA, AND MEANWHILE NOT ONLY
DID THE PRODUCTIVITY RATE SLOWED
BUT IT SLOWED RELATIVE TO OTHER
COUNTRIES, NOT JUST THE U.S.
WHEN THE O.E.C.D. STARTED WITH
THE 24 WEALTHY COUNTRIES IN
1960, CANADA HAD THE THIRD
HIGHEST PRODUCTIVITY.
IT IS NOW 17TH OUT OF THE
ORIGINAL 24.
THAT'S A PARADOX.
HOW CAN YOU DO WHAT THE
ECONOMISTS SAY WAS THE RIGHT
THING AND NOT ONLY DID IT NOT
GET BETTER IN SOME SENSE, IN A
RELATIVE SENSE IT GOT WORSE.

Steve says A QUICK FOLLOW-UP,
DON: HOW DID WE GO FROM THIRD TO
17TH?
WHAT'S THE BIGGEST THING WE GOT WRONG?

Don says SEE, THAT'S
THE PROBLEM AND THAT'S WHY IT
WOULDN'T MAKE A GREAT THING FOR
AN ELECTION STUMP.
WHAT DID WE GET WRONG?
WELL, WE DIDN'T QUITE COMPLETE
THE AGENDA THAT PEOPLE DID.
IF YOU DO 70 percent OF SOMETHING AND
DIDN'T GET THE DESIRED RESULT,
IT WOULD BE NAIVE TO THINK THE
REST OF IT -- I THINK THE
MISSING INGREDIENT, THERE'S NOT
SOMETHING RIGHT IN THE FIRM
LEVEL BEHAVIOUR.
POLICY HAS SOME ASPECTS OF IT
BUT IT'S NOT JUST POLICY.
IF WE LOOK, FOR EXAMPLE, JUST A
MONTH AGO, THERE HAS BEEN
RESEARCH ON PRODUCTIVITY AND
THEY'VE GOT THEIR FINGER ON
CERTAIN THINGS THEY THINK THAT
LEADS TO LOW PRODUCTIVITY AND
LOOK AT ONE OF THE ASPECTS WHERE
CANADA DOES TERRIBLY IS WE HAVE
VERY LITTLE CONNECTION IN THE
GLOBAL VALUE CHAINS.
SO WE SELL A LOT OF FINISHED
PRODUCTS TO OTHER COUNTRIES, WE
BUY A LOT OF FINISHED PRODUCTS,
BUT WE DON'T EXCHANGE BACK AND
FORTH PARTS.
SO WE'RE NOT TAPPING INTO THE
MANAGERIAL EXPERTISE, THE
TECHNOLOGICAL ADVANCES OF
GLOBALLY COMPETITIVE COUNTRIES
IN THE REST OF THE WORLD.
IS THAT A PROBLEM WITH POLICY?
SHOULD A NEW PRIME MINISTER BE
ATTACKING THAT?
YEAH, YOU COULD SORT OF WORK
YOUR WAY INTO IT.
BUT THAT'S A BUSINESS BEHAVIOUR.
CANADIAN BUSINESS HOPELESSLY
UNDERINVESTMENT IN MACHINERY AND
EQUIPMENT.
WE'VE GOT COMPETITIVE CORPORATE
TAX RATES.
YOU CAN ASK YOURSELF, WHY DON'T
THEY DO THAT?
I WAS IN AN ELECTION CAMPAIGN, I
SPENT FIVE MINUTES TALKING ABOUT
ESOTERIC TOPICS.
IT DOESN'T GO OVER WELL.

Steve says THAT'S WHAT WE DO
HERE, DON, AND WE GO DEEP ON IT.
LET'S INTRODUCE ANOTHER TERM,
BERD, BUSINESS ENTERPRISE
RESEARCH AND DEVELOPMENT.
HOW DOES THAT FIT INTO THE
PRODUCTIVITY PUZZLE?

Andrew says CLOSELY.
THERE ARE THREE SECTORS THAT
PERFORM R and D, GOVERNMENT, HIGHER
EDUCATION, AND BUSINESS.
WE DO QUITE WELL ON HIGHER
EDUCATION.
GOVERNMENT R and D HAS BEEN
DECLINING BECAUSE THERE'S LESS
GOVERNMENT SUPPORT FOR THAT
AREA.
BERD, WHICH IS LARGELY FUNDED BY
BUSINESS, HAS BEEN BASICALLY A
DISASTER.
THE NUMBERS CAME OUT FOR 2015
VERY RECENTLY AND WE'RE AT ABOUT
.8 percent OF GDP IS DEVOTED TO BERD.
WE WERE AT 1.3 percent AS RECENT AS
2002.
SO THERE'S JUST BEEN A MASSIVE
DECLINE IN BERD.
AND PARTICULARLY PARADOXICAL
WHEN YOU COMPARE IT WITH THE
PERFORMANCE OF OUR TWIN,
BASICALLY AUSTRALIA, WHICH IS
VERY SIMILAR TO CANADA IN MANY
WAYS, IT'S HAD THE OPPOSITE
TREND.
IT'S NOW AT 1.2 percent OF GDP DEVOTED
TO BERD, WHICH IS 50 percent HIGHER
THAN CANADA.
BACK IN 1981, WE WERE DOUBLE
THEM.
THEY HAD .2.
WE HAD .4.
SO FOR A VARIETY OF REASONS, THE
AUSTRALIANS HAVE DONE VERY, VERY
WELL IN STIMULATING BERD WHEREAS
IN CANADA WE'VE HAD A MAJOR
DECLINE, WHICH IS PARTIALLY
LINKED TO THE STATE OF SOME OF
OUR CORPORATIONS LIKE NORTEL.
THAT WAS A MAJOR CONTRIBUTOR TO
BERD AND WE LOST THAT,
UNFORTUNATELY.
SINCE BERD IS CLOSELY RELATED TO
BUSINESS PRODUCTIVITY, OUR
FAILURE IN THAT AREA IS A
CONTRIBUTOR TO OUR WEAK
PRODUCTIVITY PERFORMANCE.

Steve says YOU TOOK A LOOK AT
THIS, GLEN, YOU RATED IT, GAVE
US A “D.”
WHY ARE WE SO LOW IN THIS?

Glen says IF WE HAD AN
EASY ANSWER, WE WOULD HAVE DONE
IT ALREADY, STEVE.
THERE IS NO SILVER BULLET.
INCREASINGLY OUR RESEARCH IS
POINTING TO THE CULTURE WITHIN
CORPORATE BOARDROOMS, SENIOR
MANAGEMENT TEAMS, THEIR
WILLINGNESS TO TAKE CHANCES.
TODAY WE'RE SITTING ON HALF A
TRILLION DOLLARS CASH IN
CORPORATE BALANCE SHEETS,
WAITING FOR SOMETHING TO COME
ALONG.

Steve says SO CALLED DEAD MONEY.

Glen says DEAD MONEY.
THIS IS AFTER ALL THE TAX
CUTS -- WE'VE TRIED TO CREATE
GREAT INCENTIVES FOR BUSINESS.
IT GOES DOWN TO THE WILLINGNESS
OF CORPORATE LEADERS IN CANADA
TO TAKE A CHANCE, TO GET OUT
THERE AND INVEST IN NEW IDEAS,
ENSURE THAT WE DON'T OPERATE
WITHIN KIND OF A PROTECTED
ECONOMY BACK HOME.
WE HAVE TO CHANGE THE CULTURE
WITHIN CORPORATIONS.

Steve says CHANGE THE CULTURE
FROM WHAT TO WHAT?

Glen says REALLY TO
MORE INNOVATIVE, RISK TAKING,
THAT APPRECIATES THE VALUE OF
INVESTING IN NEW IDEAS, NEW
PRODUCTS.
AS DON SAID, BUILDING INTO
GLOBAL VALUE CHAINS.
FINDING WAYS TO BECOME A
SUPPLIER NOT JUST TO THE
AMERICANS BUT EVERYWHERE AROUND
THE WORLD.

Steve says YOU JUST, GENTLEMEN,
SAW JIM BALSILLIE ON THE
PROGRAM, TALKING ABOUT THE FACT
THAT NOBODY IN A POSITION IN
AUTHORITY IN THIS COUNTRY SEEMS
TO BE PREPARED TO LISTEN TO HIS
ARGUMENTS ABOUT THE NEED FOR
RULES, THE NEED FOR IT NOT TO BE
THE WILD WEST, THE NEED FOR THIS
COUNTRY TO START PAYING MORE
ATTENTION TO THE NEEDS OF AN
INNOVATION ECONOMY VERSUS THE
HEWERS OF WOOD AND DRAWERS OF
WATER AND SO ON.
DON, WOULD YOU AGREE WITH HIM,
THAT NOBODY IS LISTENING TO THAT
MESSAGE.

Don says I AGREE
THERE'S NO COORDINATED STRATEGY.
THERE ARE ACTUALLY SOME
ADVANTAGES TO BEING 17TH AS
OPPOSED TO BEING FIRST IN
SOMETHING.
IF WE'RE IMAGINING WE WERE
100-METER RACERS, IT'S REALLY
DIFFICULT TO BE FIRST AND STAY
FIRST.
EVERYBODY IS AFTER YOU.
YOU'VE GOT TO DO EXTRAORDINARY
THINGS.
YOU HAVE TO REINVENT YOURSELF
ALL THE TIME TO STAY FIRST.
IT'S NOT THAT HARD WHEN YOU'RE
17TH.
YOU'VE GOT TO COPY WHAT THE
PEOPLE IN FRONT OF YOU ARE
DOING.
YEAH, WE GOT THIS DEARTH OF
RESEARCH AND DEVELOPMENT, BUT
WHY AREN'T WE BUYING THE STATE
OF ART OF TECHNOLOGIES IN THE
REST OF THE WORLD.
THAT WOULD GET US ABOVE.
STUFF EXISTS OUT THERE THAT WE
DON'T USE IN CANADA.
AND IF YOU ASKED IBM IF THEY
WOULD SELL A PIECE OF SOFTWARE
IN CANADA OR THE UNITED STATES,
WE DON'T USE IT AS EFFICIENTLY
AS THE UNITED STATES.
THIS DOESN'T TAKE A LAB TO
FIGURE IT OUT.
THIS TAKES DOING WHAT SOMEBODY
ELSE DOES.
IF YOU BUY A PIECE OF MACHINERY
OR EQUIPMENT AND IT WILL ALMOST
ALWAYS BE BOUGHT OUTSIDE OF
CANADA BECAUSE WE DON'T MAKE
THAT MUCH OF IT, IT COMES
EMBEDDED WITH THAT TECHNOLOGY.
IT WOULD BE GREAT IF WE DID THE
INNOVATION, BUT WE COULD DO A
LOT BETTER IN PRODUCTIVITY JUST
BY ADOPTING WHAT EXISTS ALREADY
AROUND THE REST OF THE WORLD,
BUT WE DON'T DO THAT VERY MUCH.
THAT'S PART OF THE PARADOX AS
WELL.

Steve says GLEN, I'VE GOT TO
FOLLOW UP ON THIS.
IT IS NOT OFTEN I'VE HEARD
SOMEBODY ARGUE ANYWHERE THAT
IT'S BETTER TO BE 17TH THAN 1ST.
THEORETICALLY, IF YOU'RE 1ST,
YOU'RE GOING TO BE A LOT RICHER
THAN THE GUY WHO IS 17TH, RIGHT,
IF YOU CAME UP WITH THE
INNOVATION FIRST AND YOU PUT IT
OUT TO MARKET FIRST?

Glen says I ACCEPT THE
LOGIC OF DON'S ARGUMENT.
STAYING FIRST IS HARD WORK.
A COUNTRY LIKE SINGAPORE HAS HAD
STRONG PRODUCTIVITY GROWTH FOR A
LONG TIME NOW.
IT'S HARD WORK.
THE ARGUMENT DON IS MAKING AND I
BUY IT IS YOU CAN DO EASY THINGS
FRANKLY TO BOOST PRODUCTIVITY.
YOU CAN BUY OFF THE SHELF
PRODUCTS, IDEAS, AS A WAY TO
BOOST PRODUCTIVITY TODAY.
I WOULD LIKE TO BE MORE
AMBITIOUS.
I REALLY DON'T LIKE FINISHING
17TH.
I LIKE OUR AMBITIOUS IN HOCKEY
WHERE WE WANT TO BE NUMBER ONE
BUT MAYBE NOT IN EVERYTHING.
YOU CAN CHANGE YOUR CULTURE
INSIDE THE ORGANIZATION AND
DEVELOP THE CASH AND FIND A WAY
TO BOOST EVEN PROFITABILITY.
CHANGE THE LANGUAGE TO BUSINESS
LANGUAGE.
INVESTING TODAY CAN BOOST YOUR
PROFITABILITY TOMORROW.

Steve says I, ANDREW, DON'T
WANT TO SEEM INHOSPITABLE, BUT
ARE YOU GUYS PART OF THE PROBLEM
IF YOU'RE SAYING IT'S OKAY TO BE
17TH INSTEAD OF 1ST?

The caption changes to "What’s to be done?"

Andrew says FIRST OFF, I
CERTAINLY RECOGNIZE DON'S POINT
AND I AGREE WITH HIM.
DIFFUSION OF BEST PRACTICES
TECHNIQUES IS A KEY TO ADVANCE.
I WANT TO PUT A CAVEAT IN HERE.
FIRST, THE FIRMS THAT DO R and D ARE
OFTEN MORE EFFECTIVE IN
DEVELOPING PRACTICES FROM
ELSEWHERE.
I THINK WE WANT MORE FIRMS IN
CANADA ENGAGE IN R and D.
THERE'S PROCESS R and D AND PRODUCT
R and D.
PRODUCT R and D IS IMPORTANT.
IF YOU PRO YOU A NEW PRODUCT AND
SELL IT THROUGHOUT THE WORLD,
YOU'RE GOING TO CREATE MASSIVE
EMPLOYMENT OPPORTUNITIES AND
SALES.
IT'S REALLY IMPORTANT WE DO
THAT.
YOU WON'T DO THAT THE SAME BY
ADOPTION OF BEST PRACTICES
TECHNIQUES.
INNOVATIONS YOU'RE INTO A
TWO-PRONGED APPROACH.
DEFINITELY DIFFUSION OF BEST
PRACTICES TECHNIQUES BUT A FOCUS
ON NEW PROCESSES THROUGH R and D.

Steve says I WANT TO GO BACK TO
THE BERD EXAMPLE.
YOU SAID HIGHER EDUCATION IS
PART OF THAT BERD ACRONYM.
I WONDER WHETHER YOU THINK, AND
YOU'RE ENSCONCED AT QUEENS
UNIVERSITY NOW, WHETHER YOU
THINK CANADIANS ARE AS EDUCATED
AS WE NEED TO BE IN ORDER TO
BE -- YOU'LL FORGIVE ME FOR
SAYING IT -- IF NOT NUMBER ONE,
THEN AT LEAST NOT NUMBER 17 IN
THE WORLD?

Don says SO FIRST I
CAN'T ACCEPT YOUR INTERPRETATION
OF WHAT I SAID ABOUT 17TH.
I DIDN'T SAY IT'S OKAY TO BE
17TH.
ALL I SAID IS IT'S A LOT EASIER
TO IMPROVE WHEN YOU'RE 17TH THAN
WHEN YOU'RE NUMBER 1.
WHEN YOU'RE 17TH, YOU CAN GET
BETTER BY ADOPTING WHAT OTHER
PEOPLE DO.
WHEN YOU'RE NUMBER 1, WHAT'S
THERE TO ADOPT?
YOU'RE NUMBER 1.
THAT WAS MY POINT ON THAT.
WELL, FIRST OF ALL, IN TERMS OF
BERD, BEFORE WE GET TO THE LEVEL
OF EDUCATION, WE HAVE DOUBLE THE
PROPORTION OF OUR OVERALL
RESEARCH AND DEVELOPMENT IS DONE
IN UNIVERSITIES RELATIVE TO THE
O.E.C.D. COUNTRIES, SO THE
UNIVERSITIES CONTRIBUTE A LOT
HERE, AND THAT'S A GOOD THING.
BUT IT'S SECOND BEST BECAUSE
OBVIOUSLY IF THE RESEARCH IS
DONE IN A UNIVERSITY, IT'S
IMMEDIATELY ONE STEP FURTHER
AWAY FROM THE MARKETPLACE WHERE
IT'S DONE AS BUSINESS.
I WOULD RATHER HAVE THE
UNIVERSITIES FILL IN THE GAP
THAT BUSINESSES LEAVE AND HAVE
THE GAP STAND ALONE, BUT THAT'S
NOT THE IDEAL SITUATION.
HOW MANY TIMES HAVE WE HEARD A
CANADIAN POLITICIAN EITHER SAY
WE HAVE THE HIGHEST LEVEL OF
EDUCATED PEOPLE WITHIN THE
O.E.C.D.?
THAT'S TRUE, ALTHOUGH, IF YOU
LOOK AT UNIVERSITIES ALONE, AND
I'M NOT FOR A MOMENT DENIGRATING
THE IMPORTANCE OF COLLEGES, BUT
OTHER COUNTRIES DON'T TEND TO
HAVE THE COLLEGE SECTOR WE DO,
WE'RE ABOUT IN THE MIDDLE OF THE
O.E.C.D. PACK IN TERMS OF
UNIVERSITY-BASED EDUCATION.
WE CAN ALWAYS DO BETTER.
IF YOU LOOK AT THE RESULTS FOR
THE TESTS OF GRADE 3 OF
STUDENTS, IF YOU LOOK AT THE
15-YEAR-OLDS, WHAT WE DO WELL,
WE DO BETTER THAN THE UNITED
STATES, BUT WE'RE NOT THE BEST.
WE TEND TO BE 5TH TO 7TH
DEPENDING ON WHAT YEAR AND WHAT
LEVEL IS BEING TESTED.
WE COULD DO BETTER.
I THINK WE'VE GOT QUITE A BIT OF
A MISMATCH.
WE DON'T HAVE -- WE HAVE A
FAIRLY SIGNIFICANT PEOPLE WHO
ARE WORKING IN FIELDS THEY
DIDN'T STUDY.
WE HAVE A FAIR NUMBER OF PEOPLE
WHO ARE WORKING IN AREAS THAT
THEY THINK THEY'RE NOT BEING
ABLE TO EXPLOIT THE SKILLS THEY
HAVE.
ON THE OTHER HAND, WE HAVE A
BUSINESS SECTOR THAT SAYS IT
CAN'T FIND THE RECRUITS WITH THE
SKILL-SET THEY WANT, WHICH
INCREASINGLY IS NOT THE GENERAL,
I CAN'T FIND AN ECONOMIST, I
CAN'T FIND AN ENGINEER.
THEY TEND TO FIND THEY CAN'T
FIND RECRUITS THAT HAVE THE
COMMUNICATIONS SKILLS,
PROBLEM-SOLVING, CRITICAL
THINKING.
SO I THINK WE'VE HAD A
PHENOMENAL OUTBURST IN THE
QUANTITY OF EDUCATION,
PARTICULARLY AT THE
POSTSECONDARY EDUCATION LEVEL.
WE NEED TO LOOK MORE AT THE
QUALITY OF IT AND MAKE SURE THAT
WHAT IS BEING GENERATED IN TERMS
OF SKILL CAPACITY IN PUBLIC
EDUCATION IS MATCHING UP WITH
THE LABOUR FORCE.
I THINK SOME PIECES ARE COMING
TOGETHER, BUT A LOT MORE WORK
NEEDS TO BE DONE IN CANADA.
THEN YOU COME BACK TO YOUR FIRST
POINT, WHO'S LOOKING AFTER THAT?
WELL, I'M SORRY, NOBODY.
WE DON'T HAVE ANY NATIONAL
AUTHORITY, ANY BODY WORKING,
GUIDING DIRECTIONS IN THIS AREA.

Steve says WELL, THAT LEADS ME
NICELY TO WHERE I WANT TO GO
NEXT, AND ANDREW I THINK YOU DID
COMPARISONS BETWEEN WHAT'S GOING
ON IN CANADA AND AUSTRALIA, THE
COUNTRY THAT CAME UP A LITTLE
EARLIER IN OUR DISCUSSION, AND,
YOU KNOW, I'VE READ THAT
AUSTRALIA HAS A PRODUCTIVITY
COMMISSION.
I GUESS WE DON'T.
DO WE NEED ONE?

Andrew says ABSOLUTELY.
THE ECONOMIC COUNCIL OF CANADA
USED TO DO A LOT OF WORK IN THE
AREA OF PRODUCTIVITY.
IT WAS DISBANDED BACK IN 1992.
SO THERE'S NO FEDERAL BODY THAT
REALLY LOOKS AT THE PRODUCTIVITY
ISSUE IN DETAIL.
I THINK IT WOULD HELP A LOT IF
WE HAD A PRODUCTIVITY
COMMISSION.

Steve says WHAT WOULD IT DO?

Andrew says WELL, IT
WOULD DO STUDIES ON INDUSTRY
PRODUCTIVITY, IDENTIFY BEST
PRACTICES, BENCHMARK CANADIAN
PERFORMANCE Vis-à-vis THE OTHER
COUNTRIES, BE AN ADVOCATE FOR
PRODUCTIVITY POLICY IN GENERAL.
IN TERMS ALSO, FOR EXAMPLE,
FOSTER COMPETITION BECAUSE
COMPETITIVE INTENSITY IS A KEY
DETERMINANT OF PRODUCTIVITY.
THERE WOULD BE A LARGE NUMBER OF
ROLES THAT SUCH A COMMISSION
COULD DO.
THERE'S MANY
FACTORS THAT AFFECT
PRODUCTIVITY.
POLICY CERTAINLY IS IMPORTANT.
THERE'S ALSO RELATIVE PRICES,
INTENSITY OF DEMAND, MANY, MANY
FACTORS.
SO IT'S HARD TO SAY THAT
AUSTRALIA'S SUPERIOR
PRODUCTIVITY PERFORMANCE TO
CANADA IS DUE TO THE
PRODUCTIVITY COMMISSION.
I THINK IT'S PLAYED A MINOR ROLE
BECAUSE IT DID FOCUS ON THE
IMPORTANCE OF COMPETITION AND
THAT IS IMPORTANT FOR
PRODUCTIVITY.
IT PLAYS AN EDUCATIONAL ROLE AND
IT'S HARD TO QUANTIFY THE
IMPORTANCE OF THAT, BUT IT
CERTAINLY IS IMPORTANT.

Steve says GLEN, LET'S MOVE TO
YOU THEN.
IF WE NEED TO STEAL IDEAS FROM
OTHER COUNTRIES THAT ARE BETTER
AT THIS THAN WE ARE, WHAT ARE
THE COUNTRIES AND WHAT ARE THE
IDEAS THAT WE OUGHT TO BE
STEALING?

Glen says I WOULD START
IN NORTHERN EUROPE AND LOOK AT
THE AREAS -- LIKE SINGAPORE,
WHICH IS A CITY STATE, VERY
SMALL, BUT THEY'VE DONE A
TREMENDOUS JOB OF TRANSFORMING
THEIR ENTIRE ECONOMY OVER
GENERATIONS NOW.
IN EUROPE YOU TEND TO --

Steve says CAN I STOP YOU THERE?
THEY MAY NOT HAVE THE CIVIL
RIGHTS WE HAVE IN THIS COUNTRY.

Glen says THERE ARE
ISSUES ABOUT GOVERNANCE AND
INCLUSIVENESS IN A COUNTRY LIKE
SINGAPORE, BUT THEY'VE FOUNDED
THEIR ECONOMIC GROWTH ON
TRANSFORMATION, CONSTANTLY
THINKING ABOUT HOW TO DO THINGS
BETTER, SERVICE BASED ECONOMY AS
WELL.

Steve says I GUESS THE QUESTION
I'M PUTTING TO YOU IS: CAN YOU
DO THAT IN A COUNTRY WHERE YOU
DON'T HAVE TO FUSS ABOUT THINGS
LIKE CIVIL RIGHTS AS MUCH AS
THEY OBVIOUSLY DON'T IN
SINGAPORE WHERE WE DO HERE?

Glen says YOU CAN'T DO
IT IF YOU'RE NOT EXERCISING
LEADERSHIP, WHICH WE DON'T HAVE
RIGHT NOW.
IDEALLY WE WOULD LIKE TO HAVE
BOTH.
WE STILL WANT AN OPEN
PLURALISTIC SOCIETY IN CANADA
BUT ALSO LOOK AT THE BEST IDEAS
AROUND THE WORLD.
WE DO LOTS OF REPORT CARDS.
WE ALWAYS END UP LOOKING AT
NORTHERN EUROPE, THE SWEDES, THE
DANES, THE FINNS, THE GERMANS AS
WELL.
THEY TEND TO BE LEADERS IN
ALMOST EVERYTHING, EDUCATION,
PERFORMANCE OF THE ECONOMY,
PRODUCTIVITY AND TRANSFORMATION.
HOW TO DO THINGS DIFFERENTLY.

Steve says THEY'RE NOT NEARLY
AS MULTICULTURAL AS WE ARE.
IS THAT A FACTOR?

Glen says IT MAY BE.
CANADA IS A BIT OF A SHINING
LIGHT WHEN IT COMES TO
INCLUSIVENESS.
THEY'LL OUTSCORE US OVER AND
OVER AND OVER AGAIN AND HAVE FOR
TWO GENERATIONS NOW.

Steve says DO YOU KNOW WHY?

Glen says PROBABLY THE
WILLINGNESS TO ACCEPT NEW IDEAS.
IN ORDER TO COMPETE IN THE
WORLD, THEY'VE GOT TO FIND A WAY
FOR THEIR FIRMS TO BE ABLE TO
SELL STUFF TO THE GERMANS, THE
BRITS, AND ALSO TO THE
AMERICANS, WHEREAS WE'VE RELIED
ON A FAIRLY LARGE DOMESTIC
MARKET BUT ALSO THE U.S. MARKET
AND HAVING THE FREE TRADE
AGREEMENT WAS KIND OF OUR EASY
ACCESS POINT TO THE U.S. WHERE
WE GOT REALLY KIND OF LAZY.

Steve says LET'S PLAY SOME TAPE
HERE.
I GUESS IN THE OLD DAYS I WOULD
HAVE SAID PLAY SOME TAPE.
NOW LET US ROLL SOMETHING
DIGITAL.
ECONOMIST MARIANNA MAZZUCATO FROM
THE UNIVERSITY OF SUSSEX
SPEAKING ABOUT INNOVATION AND
PRODUCTIVITY.
ROLL IT, PLEASE.

A clip plays on screen with the caption "Marianna Mazzucato. September 28, 2015."
In the clip, Mariana speaks from a studio with the University of Waterloo logo in the background.
She’s in her late thirties, with short curly brown hair in a bob.

She says POLITICIANS NEED TO ENGAGE IN
A DIFFERENT WAY WITH BUSINESS.
WE NEED A PROFIT BUSINESS FORUM
AND I WOULD URGE WHOEVER WINS TO
IMMEDIATELY, THE SECOND DAY THAT
THEY'RE IN OFFICE, TO ACTUALLY
SET UP A FORUM WITH THOSE
BUSINESSES, THOSE FEW
BUSINESSES, BECAUSE THERE'S NOT
THAT MANY THAT ACTUALLY WANT TO
BE ENGAGING ALONGSIDE GOVERNMENT
INVESTMENTS ON THESE BIG NEW
SOCIETAL AND TECHNOLOGICAL
CHALLENGES.
IT'S RESEARCH, IT'S SUPPORTING
BUSINESSES THAT WANT TO BE
INVESTING IN VERY HIGH RISK
TECHNOLOGIES, SO PROVIDING THAT
KIND OF PATIENT LONG-TERM
COMMITTED FINANCE THAT THESE
BUSINESSES NEED.
DON'T FORGET, VENTURE
CAPITALISTS ARE ALL EXIT DRIVEN,
WANT THEIR RETURNS IN THREE OR
FIVE YEARS, THAT'S FINE TO GO
FROM ONE GADGET TO THE NEXT, BUT
YOU REALLY NEED THAT PATIENT
PUBLIC FINANCE THAT IS WILLING
TO WAIT 15 TO 20 YEARS.

The clip ends.

Steve says OBVIOUSLY ON A VISIT
TO THE UNIVERSITY OF WATERLOO
FROM WHERE SHE SPOKE TO US.
DON DRUMMOND, LET ME ASK YOU
ABOUT THE TIME LINE SHE PUT ON
AT THE END.
EVERYBODY WANTS SUCCESS
IMMEDIATELY.
THEY WANT TO INVEST.
THEY WANT TO IN NATIONAL POST.
AND THEY WANT -- INNOVATE.
AND THEY WANT IMMEDIATE SUCCESS.
ARE THERE GOVERNMENTS IN THIS
WORLD THAT ARE PREPARED TO MAKE
THE INVESTMENTS THAT ARE
REQUIRED FOR US TO GET MORE
PRODUCTIVE BUT THEN WAIT 15 TO
20 YEARS FOR THE PAYOFF?
IT SEEMS TO ME THAT THOSE KINDS
OF GOVERNMENTS ARE FEW AND FAR
BETWEEN.
WHAT DO YOU SEE?

Don says WELL, IF I
CAN FIRST MAKE A COMMENT ON THE
CLIP OR THE DIGITAL, AS YOU SAY.
I DON'T ACCEPT THE PREMISE OF
THAT.
I DON'T LIKE THAT IDEA OF THE
GOVERNMENTS WORKING WITH A SMALL
NUMBER OF FIRMS.
LET'S DIVIDE THE UNIVERSE OF
FIRMS INTO THREE DIFFERENT
CATEGORIES.
WE'VE GOT COMPANIES THAT ARE THE
GLOBAL FRONTIER OF TECHNOLOGY
AND PRODUCTIVITY.
WE'VE GOT NATIONAL LEADERS.
AND THEN WE'VE GOT THOSE THAT
ARE WELL BELOW THEIR OWN
NATIONAL LEVEL.
OUR PROBLEM IN CANADA, AS IN
MOST OTHER COUNTRIES, ARE NOT
THE COMPANIES AT THE GLOBAL
FRONTIER, NOT EVEN THE COMPANIES
AT THE NATIONAL, IT'S THIS
PUZZLE OF ALL THE COMPANIES THAT
ARE DOING WAY WORSE THAN OTHERS
IN CANADA THAT DON'T KIND OF
COPY WHAT SOMEBODY ELSE IS
DOING.
WHAT'S THE POINT OF JUST GETTING
TOGETHER WITH THE ONES THAT ARE
ALREADY THE LEADERS?
YEAH, THEY COULD DO BETTER, BUT
IT'S NOT FILTERING DOWN.
IT HAS TO BE A MUCH MORE
INCLUSIVE LEVEL THAN THAT.
LET'S LOOK AT SOME OF THE
LEADERS.
OF COURSE, WE'RE BORN TO COMPARE
OURSELVES TO THE UNITED STATES
AND WE LOOK AT ALL THE
INDUSTRIES THAT HAVE TAKEN OFF
THERE.
FIRST OF ALL, A LOT OF THOSE
WERE TAKEN OFF AS SIDE EFFECTS
OF THE DEFENCE INDUSTRY.
WE DON'T HAVE A BIG DEFENCE
INDUSTRY.
WE DON'T HAVE THE PROCUREMENT.
REALLY HARD TO COMPARE THAT
WE'RE GOING TO DO THAT.
WE DON'T HAVE -- YOU KNOW,
EVERYTHING ELSE IS TEN TO ONE,
THE UNITED STATES VERSUS CANADA.
THEY HAVE WAY MORE THAN TEN TO
ONE REALLY WEALTHY PEOPLE THAT
ARE WILLING TO BE PATIENT
INVESTORS IN DIFFERENT THINGS.
THAT CREATES A PROBLEM AS WELL.
I STILL DON'T THINK THAT THAT
MEANS THAT WE CAN'T DO BETTER.
BUT IT'S GETTING BACK INTO THOSE
OTHER COMPANIES THAT ARE JUST
NOT, EVEN AT THE NATIONAL LEVEL
OF PRODUCTIVITY, BUT I THINK IT
REALLY CUTS TO A REALLY NEAT
PHILOSOPHICAL DEBATE.
THE ATTITUDE HAS BEEN OVER THE
LAST 30 YEARS, BUILD A
COMPETITIVE LEVEL PLAYING FIELD
AND PRODUCTIVITY WILL COME.
WELL, WE KIND OF DID BUILD A
COMPETITIVE LEVEL PLAYING FIELD
AND PRODUCTIVITY DIDN'T COME.
SO DO YOU CONTINUE DOWN THAT
PATH?
I THINK THAT'S KIND OF NAIVE.
OR DO YOU GO IN A DIFFERENT
DIRECTION?
FOR INSTANCE, YOU WRITE A FREE
TRADE AGREEMENT.
COMPANIES ARE GOING TO TAKE
ADVANTAGE OF THAT.
WELL, THEY'RE NOT.
MAYBE THERE'S SOMETHING MISSING.
WHY IS ONLY 4 percent OF THE REVENUE IN
SMALL AND MEDIUM SIZE COMPANIES
IN CANADA COME FROM EXPORT AND
EMERGING ECONOMIES, EVEN WHERE
WE HAVE A FREE TRADE AGREEMENT.
MAYBE THEY DON'T KNOW HOW TO
INTERACT WITH THAT.
MAYBE THEY CAN'T FIGURE OUT THE
COMPLICATED RULES FOR SOURCES OF
ORIGIN.
MAYBE THERE NEEDS TO BE A MORE
INTERVENTIONIST GOVERNMENT ROLE.
I KNOW THAT SCARES PEOPLE.
WHEN YOU'VE GOT A PROBLEM AND
YOU'VE HAD A PROBLEM FOR A LONG
TIME, GOING BACK TO THE 1970s,
YOU'VE GOT TO START THINKING
DIFFERENT THINGS AND TRYING
DIFFERENT THINGS AND MAYBE A
COMPLETELY DIFFERENT APPROACH IS
NEEDED ON PUBLIC POLICY.

Steve says ANDREW, DO YOU HAVE
ANY IDEA WHAT THAT APPROACH
MIGHT LOOK LIKE?

Andrew says I CONCUR
WITH DON, I THINK GOVERNMENT CAN
DO MORE.
LET'S TAKE THE KEY ROLE OF A
PROGRAM RUN BY THE FEDERAL
GOVERNMENT THAT HELPS SMALL
BUSINESSES CHOOSE THE MOST
APPROPRIATE TECHNOLOGIES AND
PROVIDE FINANCING FOR THAT.
WE COULD EXPAND THAT.
THE EVALUATION SHOWED THAT
PROGRAM IS WELL LIKED BY
BUSINESS AND ACTUALLY IS QUITE
EFFECTIVE.
I CONCUR WITH DON ABOUT A MORE
ACTIVE ROLE FOR GOVERNMENT.
BUT OF COURSE THE CAVEAT IS,
IT'S NOT AS IF GOVERNMENT CAN
TURN OUR PRODUCTIVITY
PERFORMANCE AROUND.
IT CAN HELP ON THE MARGINS BUT
ULTIMATELY OUR BUSINESS SECTOR
PRODUCTIVITY PERFORMANCE IS
DETERMINED BY THE BEHAVIOUR AND
DECISIONS OF CANADIAN
BUSINESSES.
THEY HAVE THE NEED TO IMPROVE
PRODUCTIVITY AND DO IT.
IT'S NOT AS IF GOVERNMENT IS A
PANACEA FOR THE PRODUCTIVITY
PROBLEM AT ALL.

Steve says WE'RE DOWN TO OUR
LAST FEW MINUTES.
LET ME THROW ONE MORE ISSUE ON
THE TABLE.
GLEN, TO YOU FIRST ON THIS.
THE DEMOGRAPHIC ARGUMENT.
WE ARE AN AGING SOCIETY.
WE ARE TRENDING TOWARDS A
SMALLER WORK FORCE, AS THE
BOOMERS START TO RETIRE,
EVENTUALLY.
I WONDER IF YOU HAVE ANY
THOUGHTS ABOUT HOW THAT WILL
AFFECT PRODUCTIVITY GOING
FORWARD?

Glen says WELL, I MEAN,
WE'RE CLEARLY GOING TO HAVE TO
UPSKILL THE WORK FORCE IF WE IF
WE'RE GOING TO RAISE
PRODUCTIVITY.
THERE'S NO MAGIC SOLUTION TO
DEMOGRAPHICS.
VARIOUS PLACES HAVE TRIED TO
INCENT MORE KIDS, IF THAT'S A
WORD, TO FILL THE HOLES.
REALLY IT'S ABOUT SKILLS.
ENSURING THAT THE PEOPLE THAT
ARE WORKING ARE ABLE TO USE THE
MOST ADVANCED TECHNOLOGY
AVAILABLE TO TRY TO BECOME MORE
EFFECTIVE IN THE WORKPLACE.

Steve says IS IT NECESSARILY SO
THAT AS THE WORK FORCE AGES AND
GETS SMALLER, IT WILL ON THE
FACE OF IT BECOME LESS
PRODUCTIVE?

Glen says THE WORK
FORCE ISN'T NECESSARILY GOING TO
GET SMALLER.
THE GROWTH RATE WILL INCREASE
APPRECIABLY.
YOU CAN FIND WAYS TO BE MORE
CLEVER, INNOVATIVE.
IT DOESN'T FOLLOW AT ALL THAT
SLOWER WORK FORCE GROWTH

Steve says HOW OLD ARE YOU
RIGHT NOW?

Glen says I TURN 60
THIS YEAR.
I HAVE GOOD GENES.

Steve says YOU LOOK GREAT.
ARE YOU GOING TO BE AS
PRODUCTIVE WHEN YOU'RE 70?

Glen says I'M ALREADY
NOT IN TERMS OF OVERALL
ACTIVITY.
FOR EVERY HOUR WORKED I'M AT MY
HIGHEST POINT.
I PROBABLY DON'T GO HIGHER.
MAYBE WE'LL COME BACK AND HAVE
THE CHAT IN THREE TO FIVE YEARS
AND SEE HOW WE'RE DOING.

Steve says I THINK IN YOUR
HUMOROUS WAY YOU'VE KIND OF
CONFIRMED WHAT I WAS SUGGESTING,
WHICH IS IF YOU'RE AT THE TOP OF
YOUR GAME RIGHT NOW, IF WE HAVE
THIS CONVERSATION IN FIVE YEARS,
YOU, GLEN HODGSON, IF YOU'RE
STILL AT THE CONFERENCE BOARD,
YOU WILL BE LESS PRODUCTIVE.

Glen says I WOULD ARGUE
THAT I MAY BE MORE PRODUCTIVE
FOR EVERY HOUR WORKED.
THE QUESTION IS HOW MANY HOURS
I'M GOING TO GIVE UP TO THE WORK
FORCE.
I MAY BE TWICE AS PRODUCTIVE
THAN I WAS WHEN I WAS 50.
YOU TURN 60 AND YOU CAN WRITE
VERY QUICKLY, THE THINGS THAT
WOULD TAKE YOU WEEKS, YOU CAN
WRITE IN MINUTES NOW.
I MAY NOT BE WILLING TO PUT 40
TO 50 HOURS INTO THE WORK FORCE
AT THAT TIME.

Steve says DON DRUMMOND, WHERE
WERE YOU ON THIS ISSUE OF WHERE
DEMOGRAPHICS FIT INTO THE
PRODUCTIVITY QUESTION?

Don says I DON'T THINK
THE DEMOGRAPHIC ITSELF WILL
RAZOR SLOWER PRODUCTIVITY BUT IT
DOES INCREASE THE IMPORTANCE OF
RAISING PRODUCTIVITY.
OUR BIG PROBLEM IS THE NUMBER OF
HOURS WORKED IN THE CANADIAN
ECONOMY IS GOING TO GO UP HALF A
PERCENT OVER THE NEXT 10 TO 20
YEARS BUT THE POPULATION IS
GOING TO GO UP ABOUT 1 percent.
YOU HAVE ONE GROWTH TRACK ON
HEALTH CARE EXPENDITURES AND
OTHER NEEDS FOR PUBLIC SERVICES
BUT THE -- IS GOING TO LIMIT THE
TAX SIDE.
YOU COULD SOLVE THAT JUST LIKE
THAT IF YOU COULD GET
PRODUCTIVITY GROWTH FROM A 1 percent
PATH UP TO 1.5 percent BUT WE'VE BEEN
TRYING TO DO THAT FOR 30 YEARS.
IT JUST SHOWS YOU THE IMPORTANCE
OF DOING THAT.
OTHERWISE THERE'S GOING TO BE A
DEMOGRAPHIC SQUEEZE ON THE
INCOMES AND THE PUBLIC SERVICES
CANADIANS CAN ENJOY.

Steve says ANDREW, LET ME GIVE
YOU THE LAST MINUTE TO WEIGH IN.

Andrew says ON THIS ISSUE?
AGAIN, I FEEL QUITE STRONGLY
THAT THERE'S NOT GOING TO BE A
NEGATIVE EFFECT OF THE AGING OF
THE POPULATION ON PRODUCTIVITY.
NOW, IT'S TRUE THAT THE
PERCENTAGE OF WORKERS IN THE SAY
50-PLUS CATEGORY IS GOING TO
INCREASE OVER TIME, AND THOSE
WORKERS BASICALLY MAY BE LESS
WILLING TO ADOPT NEW
TECHNOLOGIES, BUT THEY HAVE
GREATER MATURITY, MORE
EXPERIENCE, AND THAT IS
OFFSETTING -- THEY'RE
I DON'T THINK THAT THE AGING OF
THE WORK FORCE IS GOING TO HAVE
ANY MAJOR NEGATIVE EFFECT AT ALL
ON OUR OVERALL PRODUCTIVITY AND
PERFORMANCE.
THERE'S MUCH MORE IMPORTANT
FACTORS AT PLAY.

The caption changes to "Tvo.org; Produced by Wodek Szemberg, @wodekszemberg"

Steve says AS A GUY IN HIS
50s, I AM DELIGHTED TO HEAR THAT.
CAN I THANK YOU FOR COMING ON
TVO TONIGHT, DON DRUMMOND FROM
QUEENS UNIVERSITY, ANDREW SHARPE
FROM THE CENTRE OF LIVING
STANDARDS, AND GLEN HODGSON
SENIOR V.P., CHIEF ECONOMIST,
CONFERENCE BOARD OF CANADA.
THANKS SO MUCH, GENTS.
YOU'RE WELCOME. THANK YOU.

Watch: Canada's Lagging Productivity