Productivity and Sustainable Competition

The basic definition of productivity is the amount of output per unit of input (of labour, equipment and capital).  So with this in mind, a basic conclusion is that Canada is not producing at the same rate or as efficiently as other developed countries in terms of its inputs.   An interesting proviso to this though would be what the World Economic Forum calls sustainability.  This is the impact that economic development has on natural environments and cohesive societies.  So, at a very basic level using a measure of productivity as defined above, a third-world worker who is working for one dollar per hour may well be more productive than a Canadian worker.  At a societal level in a western democracy, Canadians probably feel that that is not anything we wish to aspire to. It also may not be sustainable to pay someone such a low wage, although that may be resolved by increasing wages over time.  From a global level we also may see a leveling out with increasing wages in developing countries and of course that is happening with growing middle classes in many Asian countries.  At the same time, if Canadian workers are to maintain their competitive position by depending on the use of technology, investment is required.  As an agenda item for future research, productivity is well defined and measured by economists at a macro level although sustainable competition is not. Another important question would be why does Canada not invest more to increase sustainable competitiveness?  Perhaps it’s due to what the Deloitte report suggests is risk aversion.