Saturday, May 14, 2011

Productivity Includes Doing Things The Right Way

I swear I’m not an English grammar nazi – really, I’m not!

But you’d expect a government report (even if it comes from an ostensibly independent body) that’s meant to inform the public, to at least be reasonably edited and proofread.

Sadly, the Productivity Report 2010/2011 issued on Thursday by the Malaysia Productivity Corporation is littered with grammatical errors. For example:

Malaysia’s journey towards achieving high income economy was gaining momentum as reflected by a remarkable leap in its competitiveness ranking from 18th position in 2009 to 10th position in 2010. The impetus to achieve developed nation aspiration was further supported with the launching of several national programmes in 2010.

…and these are just the first two sentences of the report proper. And the punctuation!?! Or rather, the almost complete lack of it.

I got through maybe half of it before giving up from sheer annoyance.

As far as the data showcased in the report itself, it all looks decent – but then I’m no productivity specialist. I have my doubts regarding the usefulness of productivity measures, as (reading between the lines) it’s really a residual calculation more than anything else. Feel free to correct me if I’m wrong.

In other words, you take the output and take away the value of the inputs, compare over a year and that’s your “increase” in productivity. I assume that the numbers are generated from inflation corrected national accounts data. Decomposing the constituents of productivity would I imagine require a fairly complex vector regression, but that’s well within the capabilities of current econometric software. But in the end, productivity is still a residual, which means you’ll always be dealing with omitted variable bias.

And it’s a far, far different thing from the layman’s understanding of what “productivity” is. Consider that “productivity” fell during the 2009 recession – does that mean people felt less inclined to work because they felt less secure? You’d only believe that if you’re from Chicago.

Technical Notes:

Productivity Report 2010/2011 from the Malaysia Productivity Corporation


  1. Analysing the productivity per head is not a fair representation.More appropriate would be the output per dollar compensation.
    What is your take on that?And how do we compare to the other countries based on such a benchmark?

  2. I wish I had that data.

    As far as I know, they only really collect it for the manufacturing sector locally, and that's less than 30% of the economy.

    There's a bunch of stuff that BNM and DOS don't publish, and even more that they don't collect. If we're seriously going to monitor progress towards being an advanced economy, these are shortcomings that need to be addressed.