Measurements of productivity: key to survival

Industrial survival in a hyper–competitive global market–place increasingly will depend upon development of a sustainable competitive advantage. A competitive advantage, in turn, increasingly will require knowledge–intensive high–value–added content in each operating system. The degree of value–added is measurable in terms of various forms of 'productivity' (performance/cost), but conventional measures of productivity are limited in their usefulness. Output divided by labour, or output divided by labour plus capital, do not adequately assess the degree of knowledge–intensive value–added content of an operation. More sophisticated forms of productivity measurement have been developed which have been demonstrated to have a high correlation with success. Much improved strategic allocation of always limited resources can result.