In order to chart productivity, the report looks at the relationship between the amount of work someone puts in and how it is reflected in terms of wages, labour costs, taxes, raw materials, or even energy. This begs the question of efficiency, is performance better or worse depending on the level of input? Additionally how does this impact other considerations such as housing, infrastructure, welfare needs, mobility, etc. ?
The biggest challenge is the link between productivity and salaries,” says Serge Allegrezza, President of the National Productivity Board (CNP).
“Luxembourg is a country with a very high level of productivity, but we have to analyse how productivity is developed. Here we are almost at 0 and this is where we have the biggest problem. This means that other countries will inevitably overtake us, which consequentially also means that our compensations will be undervalued. We have to index our salaries not on prices but on our productivity.”
To compensate high salaries, productivity needs to rise significantly. This is also relevant for the topic of reducing working hours.
“The overall idea is that working more efficiently allows you to work better, which increases productivity from the start, which is financially viable.”
Evidently, this whole process also relies heavily on effective business management. Work and management are just two of many factors in calculating productivity. Other factors include training and qualification, capital, innovation, research, technological resources, infrastructure, and sustainability, etc.
The Minister of the Economy has received the report and asked the CNP to concretely define how to make productivity more efficient.
Investment is one of the key ways to improve productivity especially in terms of equipment, digitalisation, and artificial intelligence, just to name a few. Apart from research as well, money is the main determinant of effective productivity. However, this investment will bring important short and long term benefits according to Serge Allegrezza.
