Focus on innovation, not just productivity

[SINGAPORE] Companies shouldn't chase productivity for productivity's sake, but strive to create value through innovation instead, said participants at BT's Budget Roundtable. This would place more emphasis on tangible outcomes that ultimately boost output.

Explaining how attempts to measure productivity (such as unit labour cost) are "flawed to begin with", Mizuho Bank economist Vishnu Varathan said: "There is a risk that productivity and creativity could be almost mutually exclusive, if not slightly at odds at the very least. If productivity is measured within the year (as) how much more output you can have, (it does) to some extent exclude the creative process that may have a longer gestation period.

"The way to go about it is to not get hung up on year-to-year measures, (whether they reflect) slippages or spurts in productivity. We're in it for the long haul, and I think we ought to treat it as such," he added.