Productivity has been-and remains-the main component of economic growth: it is the "residual" element that still has not been explained once all the increases in the amounts of the factors of production are accounted for. It is enhanced by substituting capital for labour, or 'taking the labour out of work'. This has been continuously taking place since the beginning of the Industrial Revolution: labour intensive processes of producing materials, transportation, information and leisure, for instance, have all been substituted by capital-intensive processes using new machinery and devices. These drastically reduce the number of workers needed in the production processes, but through the additonal wealth generated new demands for goods and services are opened up, thereby increasing employment elsewhere. At the same time, the continuous drive to make better use of labour-both as 'brawn-power' and 'brain-power'-generates new employment opportunities, at least for the qualified and healthy members of the workforce who are able to cope with change.
Ireland - the Celtic Tiger
Ireland’s economy languished in the early 1980s and became critically ill in 1986. All parties came together to take drastic action. This was spelled out in successive 3-year national partnership programmes, which have in particular set out wage increases for the coming 3 years. This has enabled management and trade unions to concentrate on key is-sues for Irish competitiveness—corporate strategy, technical change, training in the workplace and working practices. Since 1987 the number and scale of strikes have fallen and industrial conflict has centred on union recognition and corporate restructuring, rather than pay—it has become the ‘Celtic Tiger’.
In the mid-1980s the economy faced a number of serious difficulties, the most important of which were declining employment, substantial emigration and a rapidly rising national debt. To deal with these problems, the Government, employers and trade unions agreed in 1987 on a three-year Programme for National Recovery. This emphasised fiscal and monetary stabilisation, tax reform, pay moderation and sectoral development on the basis of consensus. The programme proved successful and was followed by two others: the Programme for Economic and Social Progress (1991 to 1993) and the Programme for Competitiveness and Work which began in 1994. The most recent of these is Partnership 2000 which covers the period 1997 to 2000 and builds on its predecessors the Programme for Competitiveness and Work, the Programme for Economic and Social Progress and the Programme for National Recovery. Over the period of these programmes economic growth was over twice the EU average, inflation had fallen to one of the lowest rates in the EU, and employment in the private non-agricultural sector had shown an annual average growth of about 2.5%.
"THE IRISH MIRACLE"
Ireland was northern Europe's perennial economic loser until it shifted course during the late 1980s. Prior to that it suffered from slow growth, brain drain, a low productivity, high tax economy with militant labour unions and a ballooning national debt that reached 129% of GDP. In 1987 labour, business and government signed consecutive three-year agreements designed to reduce costs and boost profits. Corporate taxes were slashed to 10% to attract investment. Irish unions embraced wage moderation and labour peace in exchange for tax and government spending cuts. Public spending as a percent of the economy declined dramatically. Tax cuts reduced government revenues in 1988, but by 1989 economic growth pushed revenues above pre-cut levels. Growing investment dramatically improved productivity that allowed large wage increases, which union leaders calibrated to preserve healthy profits. Even as wages have shot past Canadian levels, unit labour costs have declined, reinforcing profits and the incentive to invest.
The Frontier Centre for Public Policy is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity"
John Bruton is the leader of Ireland's Fine Gael party. He has had a varied and extensive public life in Irish politics since 1969. He was Finance Minister when Ireland slashed corporate taxes to create the Celtic Tiger economy and boost income growth to among the fastest in the world. He is probably most widely recognized for his leadership of the Rainbow Coalition government between December 1994 and June 1997 as Prime Minister of Ireland. In this capacity, he oversaw an administration that introduced widespread legislative reform and guided the country into a period of unprecedented prosperity.
A GENERATION ago, if someone had suggested that workaholism would become a major Irish scourge, they would have been laughed right out of the pub. These days, we may be drinking more alcohol than ever, but the easygoing Irishman appears to be an endangered species. Recruit Ireland
Old styles of management ineffective today By Tina Neylon
We are living in a new Ireland, the country has changed fundamentally over the last 10 years, and this has had a huge impact and consequences for employers," says Peter Mulholland. "The workforce is very different, its expectations are much higher than before, and this has implications for how we recruit and retain staff. Consequentially, the culture within companies is also having to change." Warming to his theme, he explains how these changes are manifested. Recruit Ireland
European Association of National Productivity Centres
The Association has three main areas of concern:
Essential Reading [Ed.] A recent project was the production by directors of a Memorandum on Productivity, Innovation, Quality of Working Life and Employment and a resulting "Declaration on Productivity". As a follow-up to this project, good practice examples have been drafted by members to illustrate actions in the various fields of "factors contributing to productivity enhancement": competition and quality; innovation and technology; employment; work organisation and learning organisations; safety & health and working conditions; skills and qualifications; environmental protection; and social partnership.
EANPC Momorandum Best Practice Cases
ILO's 2001 Virtual Productivity Conference
Efficient flow and human centred assembly
Austria (WIFI): Benchmarking as a Tool for Enhancing Productivity
Productivity centres east of the Elbe (Tony Hubert)
Raising EU pre-accession countries' competitiveness (Matteo Fornara)
Astonishing success: Economic growth and the labour market in Ireland by Philip J. O'Connell, 1999, ILO Employment and Training Paper No. 44 (ISBN 92-2-111756-1)
Employment revival in Europe: Labour market success in Austria, Denmark, Ireland and the Netherlands by Peter Auer, ILO, 2000 (ISBN 92-2-110841-4)
The most productive nations
(Dirk Pilat, OECD): Summary of an article in the Canadian International Productivity
Monitor, Editor: Andrew Sharpe—Number Three, Fall 2001
The OECD secretariat was asked by its member countries in 1999 to examine the variation of growth (and productivity) performance, analyse its causes and provide guidance for policy making. Among its findings are that Australia, Ireland and the Netherlands registered markedly stronger growth of GDP per capita in the 1990s compared with the 1980s, with Finland, Canada, Greece, Iceland and Sweden following in the second half of the decade. One important reason for this growth has been the simultaneous improvement of labour productivity and labour utilisation—i.e. more people worked more productively. In contrast, some European countries had strong productivity growth, but low employment growth … Their higher productivity growth may have been achieved by a greater use of capital or by dismissing (or not employing) low-productivity workers. Labour utilisation points to the importance of labour market performance in explaining growth differentials. Labour productivity can be increased … by improving the quality of labour used in the production process, increasing the use of capital and improving its quality, and achieving greater efficiency in the combination of these factors of production— Multi-Factor Productivity. MFP reflects many types of efficiency improvements, notably improved managerial practices, organisational changes and innovative ways of producing goods and services.
Enterprise Ireland - Enterprise Ireland is the Agency charged with support and development of Ireland's indigenous industries
Employment Equality InformationEmployment Equality Act, 1998 (Full Text)
Institute of Personnel and Development Irish Management Institute Health and Safety Authority Department of Enterprise and Employment eWork Telework Ireland Labour Relations Commission Employment Law in Ireland IBEC
Irish Management Institute
Health and Safety Authority
Department of Enterprise and Employment
Labour Relations Commission
Employment Law in Ireland
Other alternative views - these considerable achievements are not without their detractors - here are a few ...
The "Bucolic Cry"
"United we stand" - the minority Union view
"The Brady Bunch"
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