Productivity Gap Widens

March 18 2002 - Canada's inability to compete successfully in the 21st century's global economy is posing a serious threat to the country's standard of living, according to Jan Grude, National Chair of the Canadian Association of Management Consultants.

Speaking to students and consultants at the Simon Fraser University in Vancouver, British Columbia he said that "our ability to compete in the economic playing field of liberalized trade has been eroding for decades and is reaching crisis proportions."

Jan Grude cited a new Association study - "Enhancing Productivity Through Innovation" - which paints a bleak picture of Canada's deteriorating economic position, including:

- A 25% widening of Canada's productivity gap with the U.S. during the past 20 years.

- A 20% decline in Canada's standard of living relative to the U.S. since 1961.

- A significant lag in personal income: the average Canadian family of four would have had additional income of $10,000 in 1999 had Canada maintained its productivity ranking among OECD countries.

The study concludes that unless these gaps are closed, Canada will experience "continued erosion of our standard of living and a self-fulfilling spiral of losing or being unable to attract the skills and talents needed in a knowledge-based economy."

Jan Grude said that the primary task of management consultants in the 21st century is to reverse this generation-long trend.

"Management consultants must be the oracle and the spearhead of Canadian business, first bringing to clients a global vision of innovation acquisition, productivity enhancement and market development and then driving home solutions," he said.

"Canadian companies that fail to adapt to the rigours of worldwide competition have no where to hide. They will either be driven into oblivion or taken over by those who are more innovative, more productive and more enterprising."