Media pundits love to talk about the productivity crisis.  (Well, let’s be honest, they love to talk about any crisis…. and if there isn’t a crisis to talk about, they will invent one.)

The productivity crisis isn’t really a crisis.  The decline and stagnation in productivity has been a general factor in the Western world for the last decade. There are lots of reasons suggested and causes put forward but as we said last week, it is is too easy to blame the workforce – or to assign it to any one of a host of external factors.

The real reason for the productivity decline (take a deep breath here) is a lack of bold leadership over a significant time period.  One off the problems of the Western approach to business ownership and to government is its focus on the next 5 years as a maximum planning horizon.

Governments must achieve whatever they set out to do – or at least whatever they promise to do – before the next election

Business executives have a much lesser time period; they are forced into concentrating on the next quarter’s profits.  If these are down, the share price may tank- and with it, the executive’s bonus.

This is no recipe for infrastructure investment by government or business process investment by companies.

We need leaders that are willing to explain to their citizens, or their shareholders, why they intend to take longer-term decisions and make longer-term plans.  They then need the courage of their convictions to set in train the long-term actions that will ensure these plans are implemented successfully.

If we have a crisis now, it is a crisis of leadership.

And just remind you,  it was not, and indeed is not, always thus. 

Quite a few countries with an authoritarian regime do take a longer-term view because they do not fear the electorate.

Even democratic Victorians made lots of profits but built lots of infrastructure – railways, roads, sewage systems and so on.  Without this infrastructure, we would not have had the industrial revolution.

So, leaders – stand up, take deep breath, look at a calendar rather then your current diary and start to formulate a longer view.

We might just avert ‘the crisis’.