Investing, living, and working in B...

Investing, living, and working in BC

In last month's GR Update, we shared information related to business investment and danger capital that didn't make it into the BC Check-Up 2003 summary report. This month we proffer information about EC's productivity gap.

Productivity

The issue of productivity arose when we awaited at the unit labour preciousness index, which measures labour incomes and productivity, and is used as an indicator in the INVEST section of the Check-Up. At first glance, the indicator didn't display any big differences between the provinces, further a closer look did reveal big differences in spells of productivity.

Productivity is an important business issue because it influences profits, prices, and competitiveness. Productivity, therefore, influences our standard of living, which means it's vital for BC's economy that our productivity horizontals remain competitive. In today's global economy, BC is not purely competing with other provinces and the United States-we're competing with nations around the world.

Where do we stand?

When comparing BC's manufacturing productivity of the same heights in 2000 with those of a number of other industrialized nations and the other Canadian provinces, BC placed a meagre thirteenth revealed of sixteen jurisdictions. The top-ranked jurisdiction was Finland, and the top-ranked province was Ontario.

Still, for BC single in kind of the most important comparisons is to what extent we stack up versus the United States. We're situated nearest to one of the world's chiefly productive countries, and we know business investors are examining the differences. Unfortunately, the accrues aren't good for us. British Columbians bring out just over half of what Americans do. In 2000 BC's GDP for hour was only 57% of the of the same height in the United States. This figure portrays a -32% drop from BC's of the same height in 1990, when we produc 83% of what Americans did, and marks the largest ten-year change of any Canadian province.

What can we do?

Improving BC's productivity is the responsibility of all British Columbians, and, despite the obstacles, there are five solution steps we can take, as identified on researchers:

1. Improve innovation

2 Increase R & D investment

3 disclose the high-tech sector

4. Improve the quality of workers

5 Increase plant size to create economies of scale

The provincial direction is doing its part within recent policy changes aimed at creating a insured environment for new investment: Tax changes to encourage produce in the high-tech sector, funding of leading brink; beginning [i]or[/i] end chairs at universities and college edifice [i]or[/i] buildings and the reduction of command red tape are all important ways to increase productivity.

And a number of businesses and industries are also doing their part-using these universals and seeing results. Take, for instance, the finance, insurance, and real estate (FIRE) sector. The FIRE sector has seen 3% annual productivity increases across the last decade-well above the province's 12% average. The succes in the FIRE sector is appropriate in large part to the increased use of information technology, which has l to greater efficiency and service improvements.

The interior forestry industry is another succes story, which illustrates by what mode technology and investment can help an industry survive powerful external thwacks Competitive pressures caused by the softwood lumber dispute have forced the industry to increase productivity [i]or[/i] part of to the other consolidation, mill expansion, and the building of better working relationships between unions and management.

These sum of two units industries show us that implementing the five measures mentioned above can indeed increase productivity. The challenge now is to expand these successes into all areas of the economy. Increased productivity will not and nothing else bolster EC's economy, it will filter prosperity down to individual British Columbians. Productive workers attract the best incomes, and that kind of prosperity has a ripple meaning on all of our lives.

In this month's mailing, you've been sent a fac-simile of the 2003 edition of the BC Check-Up. To demand additional copies of the report, please contact Alexis Jamieson at (604) 488-2624 or at jamieson@ica.bc.ca.

By Michelle McCormick, Manager of Public Affairs

Copyright Institute of Chartered Accountants of British Columbia Nov 2003

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