Schmidt

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Alberta’sAlberta’s PRODUCTIVITY Action Plan PRODUCTIVITY Action Plan

Alberta Finance and EnterpriseAlberta Finance and Enterprise

“Creating Alberta as the Regional Leader in Productivity and Innovation”

THE NEED FOR

AUTOMATION

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Finance and EnterpriseFinance and EnterpriseMinister’s MandateMinister’s Mandate

Develop and implement policies, initiatives Develop and implement policies, initiatives and tools to help Alberta businesses to and tools to help Alberta businesses to improve their productivity and global improve their productivity and global competitivenesscompetitiveness

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What is Productivity?What is Productivity?

Working smarter not harder!Working smarter not harder! The value of what we create in an economy (GDP) The value of what we create in an economy (GDP)

per unit of resources – whether the resources are an per unit of resources – whether the resources are an hour of labour, an hour of machine time or a barrel of hour of labour, an hour of machine time or a barrel of oiloil

Labour productivity is defined as:Labour productivity is defined as: GDP per number of hours workedGDP per number of hours worked Annual change in real output per hour workedAnnual change in real output per hour worked

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Alberta Labour Productivity Alberta Labour Productivity GrowthGrowth

1.0%

1.1%

1.3%

1.4%

1.4%

1.5%

1.5%

1.6%

1.7%

1.7%

3.4%

Alberta

British Columbia

Quebec

Ontario

Canada

Prince Edward Island

Nova Scotia

New Brunswick

Manitoba

Saskatchewan

Newfoundland and Labrador

Total Economy Labour Total Economy Labour Productivity Growth Productivity Growth

Rates Rates 1997 – 2007 (Based on 1997 – 2007 (Based on

Hours Worked)Hours Worked)

High overall productivity - yet - Reveals the lowest average growth rate amongst the provinces

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Why Is Alberta’s Productivity Why Is Alberta’s Productivity Lagging? Lagging?

Significant capital investment in Significant capital investment in the energy sector not yet the energy sector not yet ‘productive’‘productive’

Worker “tool time” and Worker “tool time” and productivity in major projects is productivity in major projects is problematicproblematic– Persistent labour challengesPersistent labour challenges– Pressures on other economic Pressures on other economic

sectors from capital flows to oil sectors from capital flows to oil sands related projects and sands related projects and competition for labourcompetition for labour

Low investment in new Low investment in new equipment and technology equipment and technology

slow adoption of new slow adoption of new processesprocesses

Lagging workplace trainingLagging workplace training

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There’s Something About There’s Something About ProductivityProductivity

Efficiency vs. EffectivenessEfficiency vs. Effectiveness– Efficiency = doing things rightEfficiency = doing things right– Effectiveness = doing the right thingsEffectiveness = doing the right things

Peter Drucker: “One without the other is not Peter Drucker: “One without the other is not worth a damn!”worth a damn!”

Constraints in the Global EconomyConstraints in the Global Economy– ResourcesResources– OutsourcingOutsourcing– Supply/Demand BalancesSupply/Demand Balances

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It’s Also About INNOVATIONIt’s Also About INNOVATION 80% of 80% of

innovation is innovation is non-technicalnon-technical

Must capture Must capture multiple forms multiple forms and sources of and sources of innovation to be innovation to be highly highly competitivecompetitive

InnovationInnovationEngineEngine

Market Extension

Technology Invention

Product Improvement

IntegrationSystem

Solutions

Business Models

Re-Invent

Process Improvement

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Our VisionOur Vision

Our MissionOur Mission

“Alberta is known as the most productive and innovative region in the world”

“Create a globally competitive environment for Albertans to prosper and thrive through

collaborative innovation”Purpose

““To establish “Productivity Inc” as To establish “Productivity Inc” as Alberta’s umbrella program whose purpose Alberta’s umbrella program whose purpose

is to take productivity, innovation, and is to take productivity, innovation, and strategic competitiveness to new levels of strategic competitiveness to new levels of

awareness and application”awareness and application”

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Productivity Inc. Productivity Inc. Connection point for all industry - immediate access to Connection point for all industry - immediate access to

information, tools and programs and assistance in information, tools and programs and assistance in productivity improvement. productivity improvement.

Formation based on drivers of productivity:Formation based on drivers of productivity:– Investment in capital - machinery and equipmentInvestment in capital - machinery and equipment– Technology adoptionTechnology adoption– CompetitionCompetition– Clusters of people and businessesClusters of people and businesses– InnovationInnovation– Skilled workers and capable managementSkilled workers and capable management– Business policy and regulatory environmentBusiness policy and regulatory environment– Scientific and engineering talentScientific and engineering talent

Pillars of Action: Pillars of Action: 1.1. Education and AwarenessEducation and Awareness2.2. Enhancement Tools, andEnhancement Tools, and3.3. PoliciesPolicies

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Productivity Inc.Productivity Inc. Primary clients include:Primary clients include:

– Alberta-based industry (manufacturers, Alberta-based industry (manufacturers, processors, and service providers)processors, and service providers)

– Institutions, post secondary education Institutions, post secondary education centers, government, health centers, government, health organizations, and relevant industry organizations, and relevant industry associationsassociations

– Community-based economic Community-based economic development agenciesdevelopment agencies

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Productivity AlbertaProductivity Alberta Web Portal Web Portal

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Current Activities & ToolsCurrent Activities & Tools Lean Manufacturing AssessmentsLean Manufacturing Assessments Management Capability and Management Capability and

Capacity Benchmarking ToolCapacity Benchmarking Tool Pressure Vessel Competitiveness Pressure Vessel Competitiveness

Benchmarking StudyBenchmarking Study Construction Mega Projects Construction Mega Projects Automation Seminars Automation Seminars

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PolicyPolicy

Part of an overall productivity policy Part of an overall productivity policy frameworkframework

A broad review of policy from a A broad review of policy from a standpoint of conduciveness to standpoint of conduciveness to productivity growth including undertaking productivity growth including undertaking of a competitive gap analysisof a competitive gap analysis

We will review and compare other We will review and compare other jurisdictions' productivity and tax policiesjurisdictions' productivity and tax policies

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Next Steps for 2008Next Steps for 2008 Department will forward Minister's Report (MR) Department will forward Minister's Report (MR)

through government's decision making process - Fallthrough government's decision making process - Fall Begin Building and Connecting Networks - SummerBegin Building and Connecting Networks - Summer Leadership Team in place by AugustLeadership Team in place by August Business Plan submitted in OctoberBusiness Plan submitted in October Coordinated productivity policy frameworkCoordinated productivity policy framework Launch Productivity Inc in November Launch Productivity Inc in November Incorporate productivity into labor force strategy Incorporate productivity into labor force strategy

(BETW) (BETW) Developing business productivity toolkitDeveloping business productivity toolkit