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Alberta tackles its productivity gap


October 6, 2010
by Robert Robertson

Alberta manufacturers‘ productivity growth is the lowest in Canada.

Photo: iStockphoto

With the price of crude in the neighbourhood of $77 to $80 a barrel, Alberta’s oil industry is enjoying renewed prosperity, but the province’s manufacturing sector needs to do something about its productivity performance, which is why the Edmonton-based Productivity Alberta was formed in 2008.

Despite the province’s success in the energy sector this specialized unit of the Alberta government says the province’s productivity growth, over the longer run, has been the lowest in Canada and lags most developed economies.

Not that Canada’s performance has been all that hot. Between 2005 and 2009, Canada’s total labour productivity growth advanced just 0.1% per year, the second worst among G-7 countries after Italy, according the New York-based Conference Board.

There are several factors contributing to Alberta’s poor performance:

• slow or no adoption of new processes and technologies to enhance efficiency;

• inadequate investment in machinery, equipment and technology;

• lack of innovation to enable the creation of new products and technologies; and

• lagging workplace re-organization and worker training.

“Before the economic dip, we found many Alberta businesses didn’t have the time to poke their heads up and look at the efficiencies of their operations,” says Lori Schmidt, senior director of Productivity Alberta. “Even though Alberta companies were at capacity, their bottom lines were shrinking, but they were also seeing more domestic and global competition moving into their markets.”

The unit began with the input of more than 200 of the province’s businesses, which helped craft the menu of resources and services available to companies, including a useful online benchmarking assessment tool (www.productivityalberta.ca).

“We became the connection point to help Alberta companies help themselves,” says Schmidt. “This involves assessing their productivity within their organizations and connecting them to information and tools. We collaborate with private and public sector companies, organizations and the federal government to drive manufacturing productivity.”

To improve innovation and competitiveness, Schmidt recommends Alberta manufacturers implement lean strategies that include the use of new automation and technology. Productivity Alberta helps firms get started on the “lean journey” with its Process Improvement Services Unit, a productivity enhancement program with Northern Alberta Institute of Technology (NAIT) and through pilot projects.