4 Myths that prevent progress in productivity

There is a certain consensus in the economic world that productivity is required to achieve a sustained long-term growth engine. The same that has been stagnant for the last decade in our country, as evidenced by official figures. Therefore, there is no room for digressions, decisions must be made, and not stop at "trying to make efforts" to reverse that trend. Above all, because doing so gives a positive return to workers, companies and the country.

It is even more urgent in view of the aspirations of the elected government to reduce the working day, increase the minimum entry wage and advance in tax reform. There are already proven methodologies to achieve this, and several. What happens is that we are not applying them.

Although we know the diagnosis, what limits us then? Let's clear the main myths, which do not allow us to move forward:

The first of these is the belief that a large capital injection is required. According to empirical experience in the public and private world, the first 30 to 50% increase in productivity does not require investment. As is well. It can be solved by looking at the business processes of organizations and adjusting them with the human capital and infrastructure available. Then, having made those initial methodological adjustments, the investment required -to achieve the following growth percentages- is less, since it is invested in specific needs, in a more focused and assertive manner.

The second myth is that being more productive means working more. In reality, it is working less and more efficiently, using resources optimally and at the right times.

The third mistaken belief is that productivity does not increase wages. It has been proven that by improving productivity, a greater capture of value is produced, which allows the increase in salaries to retain the committed human capital. It even makes it possible to lower the prices of goods and services, and maintain profitability levels so that the appropriate taxes are paid, and thus respond to social demands.

And the fourth myth is that we Chileans are not very productive because we turn around. The empirical reality is that many more times business processes are poorly thought out and that makes it seem that we have turned around. What is required is that the same workers at different levels look at the operations critically and are listened to, to make the changes at once according to what is required.

Therefore, we must demolish these myths and face the country's challenge, which is to increase productivity by 10% within 10 years. It is a substantive, achievable and realistic goal, which depends on doing the job well. The important thing is that it be carried out in a methodologically legitimate way, taking care of the processes, so that it is sustainable and so that the income of Chileans actually increases.

Francisco Ortuzar

Orca Business Consulting

Original Text in El Mercurio de Valparaiso