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Productive Capacity Building
Around the world, the debate on productivity is changing. Traditionally, the concept of productivity and competitiveness centred on the efficiency ratio between input and output. This has now evolved to include the human element – productive capacity building of people.
Emerging markets, such as ours, face serious challenges to improve their economies to the level where they can compete effectively with developed countries. For South Africa, the challenge is not only establishing internationally-accepted economic policies at government level, but to instill a culture of productive behaviour and best productive practices. As part of the global village, we as a country, region and continent have to raise ourselves to the level of global winners in quality production of commodities and competitive productive practices.
From an economic perspective, productivity is a wealth-generating process that drives growth. At the organisational level, wealth generation offers strategic opportunities to distribute wealth to all stakeholders, from investors to suppliers of labour.
Building productive capacity is therefore about creating the appropriate environment, systems and processes that enable people to identify, harness, develop and optimise the use of resources at their disposal. Producing improved products and services (effectiveness) would, for example, stimulate demand and better use of fixed capacity. Productivity could be improved by better management or better allocation of resources and a subsequent higher rate of conversion (efficiency) or increased utilisation of resources. All these, in turn, may be driven by factors such as innovation, quality, customer-perceived value of products or services through branding, employee attitudes, and even environmental conditions.
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