Unlocking Productivity For The Next Decade

We have been waiting for more than a decade for the much-anticipated boost in productivity that Fourth Industrial Revolution technologies (AI, cloud, automation) were supposed to bring. Finally, in the darkest of times, we are seeing signs that the boost is coming. To seize this unexpected momentum, we must do two things: understand what’s behind the uptick (it’s not just virtual/remote work); and start focusing on the biggest asset we have to drive and sustain these productivity gains – the work itself.
Productivity is on the rise

Just-released numbers from the US Bureau of Labor Statistics show labor productivity increased 4.6% in the third quarter of 2020. This latest jump followed a 10.6% productivity gain in the second quarter. Each gain was significant, but for different reasons. In the second quarter, both labor output and hours worked dropped, indicating that the productivity gains stemmed from job losses and subsequently high unemployment rates. We would term this “bad productivity” as it represents a future of work that none of us had envisioned or desired. However, this was not the case in the third quarter, which not only had the largest gains in output and hours worked since the department began tracking in 1947, but also showed output outpacing hours worked. While it takes more than a couple of periods of productivity data to discern a trend, for business leaders, this may be one of the most important signals in a decade.

These third quarter numbers tell us that something has shifted in the last few months. That shift was driven by a realization that the crisis was not just a moment-in-time that we needed to respond to, but rather the ushering in of a new, disruptive reality that we need to learn to live and work in.