'Jersey has a major problem with productivity. We must rediscover some of our ingenuity and energy'

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By John Boothman

Among the failings of old age is a deplorable tendency to spend more time thinking about the past than anticipating the future.

Perhaps this is excusable. The biblical human lifespan is 70 years, a milestone I passed quite recently. Modern medical science, improved food and hygiene, more exercise and better lifestyles have extended this arbitrary cut-off date by ten or 15 years, but only a cryogenicist would delude themselves that they have many more decades ahead. Naturally, therefore, we oldies are constantly tempted to dwell on the wonderful (or not-so-wonderful) route already traversed, rather than contemplating the shorter and rockier road ahead.

Unfortunately, though, repeated trips down memory lane tend to distort our perspective and deflect attention from the important challenges and opportunities that face us now and in the future: not just for ourselves and those closest to us, but friends, acquaintances and the community as a whole.

The novelist Robert Harris was quoted recently as saying that those born in the 1950s had won first prize in the lottery of life. Certainly we have much to be thankful for: the end of post-war privations, economic recovery and growth, the welfare state, jobs that were (mostly) plentiful and well-paid. Now in retirement many of us enjoy the benefits of home ownership (with mortgages long since paid off) and decent pensions.

Of course that is an oversimplification, and undoubtedly many older people are in dire financial straits, but for most of us our journeys through life have been eased by favourable tail-winds. Will our children and grandchildren fare as well? If, as another sage said, civilisation means planting seeds knowing you won’t live long enough to see them grow into trees, what can we do to help those who come after us?

With a low crime-rate, bearable taxes and full employment, here in Jersey we may well count our blessings. Yet the outlook is in reality uncertain, and for some of us bleak. In the longer term, prosperity is dependent on a buoyant economy, grounded in rising productivity. That P-word is often misunderstood as a euphemism for exploitation or even slave-driving, but it’s simply a measure of the economic output of the workforce. If productivity is rising, there is more income and wealth to spread around; if not, the same-sized cake must be carved and recarved to meet the demands of state and people, a process that becomes progressively more problematic.

In practice, living standards are likely to stagnate over time without productivity growth, and tax revenues will tend to level out, putting pressure on government spending plans. If tax rates are raised to address this, household budgets will come under further strain; if spending is cut (without corresponding efficiency gains), vital services may be jeopardised. Some of these issues have already found their way into political debate.

Jersey has a major problem with productivity, dating back to the early years of the century. There are several reasons for this. A series of economic crises, followed by record low interest rates, has led to retrenchment by the banks – formerly the premier league in the finance sector. Alternative businesses have sprung up, but in general they are less profitable, requiring a higher headcount for any given measure of output. Labour-intensive activities tend to yield lower returns per head, and many of the jobs created in recent years in sectors like bars and catering, garden maintenance, social care, horticulture and retailing are (in economic terms) relatively unproductive. The same applies to segments of the government workforce, and ‘working from home’ probably hasn’t helped either.

To be clear, saying this does not mean that these employees are work-shy or incompetent. While some jobs can be made more productive by capital investment, many cannot: the day when care-home staff can be replaced by robots won’t dawn in my lifetime. But across the economy as a whole, we do need to find solutions to our anaemic economic growth rate, not just to ensure personal prosperity and well-funded government services but to slow the rise in the population.

As mentioned, many organisations can be made more productive by equipping employees with the technology (and other tools) they need to achieve higher output. The government could set a lead here by embracing the digital revolution with more focus and fervour than it has managed so far. The sheer volume of manual clerical work required to keep the administrative wheels turning (spinning is too strong a word) is a standing indictment of successive failures to automate and digitise data processing.

More encouragement needs to be given to entrepreneurs and start-up businesses, which may prove to be the life-blood of our economy in the years ahead. Riskier but worth a try is to push up the minimum wage in an attempt to convince companies to use their staff more productively (the risk being that this could force some firms, already under significant cost pressures, out of business altogether).

Bringing more people into (or back into) employment would not raise productivity as such, but if older people for example deferred their retirements for longer it might help reduce our reliance on imported labour. Perhaps those working past normal pensionable age could be offered an incentive in the form of a higher state pension, in return for starting to draw it later?

Although I said (and meant) that there is no shame in low productivity as such – some occupations are strictly hands-on – there can equally be no excuse for shirking or, as the current expression has it, ‘quitting quietly’. This is a euphemism for not pulling your weight at work, and doing the minimum necessary to keep your job. It’s a foolhardy and damaging concept, that can only further undermine attempts to harness and deploy all our resources effectively. For most of us, hard work is not only more rewarding but also essential, if we and those we love are to enjoy the same financial security and job satisfaction as their forebears – and that equally applies to our community as a whole.

The ideal for a small island is a vibrant, high-productivity economy with a light footprint. This is most likely to offer interesting, well-paid careers to hardworking local people, and generate sufficient tax revenues (even at moderate rates) to fund a full suite of public services. Roughly speaking this was the situation through the 1970s, 80s and 90s as the finance industry raced forward. Jersey remains, by the standard of other micro-states, a prosperous place, but things are different now. We need to rediscover some of the ingenuity, energy and determination that were hallmarks of that earlier period, if our aspirations to provide better lives for our successors are to bear fruit.

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