INTHEBLACK July 2025 - Magazine - Page 48
P O D C AS T
Beyond GDP:
Rethinking productivity
in today’s economy
SUBSCRIBE
to the podcast
Words Lisa Uhlman
“We need to be looking at a whole bunch of different
things and trying to keep them in our head, rather
than worrying too much about single numbers.”
JOHN QUIGGIN, UNIVERSITY OF QUEENSLAND
Productivity growth is a central focus of
economic policy, yet John Quiggin, professor
of economics at University of Queensland,
believes the tools used to measure it no longer
reflect how people actually work. In this
INTHEBLACK podcast episode, Quiggin
discusses how, in an economy reshaped
by technological change, thinking around
productivity also needs to evolve.
EVOLVING ECONOMY, FAMILIAR TOOLS
For much of the 20th century, productivity
was easy to visualise, but the modern
world of production is far more complex,
comprising the labour, capital and other
inputs required to produce something,
as well as aggregated output.
“That gets much more complicated than
simply how many shoes per hour a shoemaker
made or how many tonnes of wheat a hectare
produces,” says Quiggin.
To reflect that complexity, in the 1990s
the Australian Bureau of Statistics and
the Productivity Commission began to
champion a measure known as multifactor
productivity (MFP).
“At that time, they had a very good news story
to tell — we’d had a bunch of economic reform,
and it seemed like we were getting this big
acceleration in multi-factor productivity,”
Quiggin says.
But the growth soon dropped and has
remained weak throughout the 21st century.
“We had just had a big recession. Everybody
48 INTHEBLACK July 2025
was being pushed to work harder and longer,”
Quiggin says, with financially strapped workers,
for example, more willing to work overtime.
“As the economy improved, people started
being unwilling to do that, and so we haven’t
really seen that strong productivity growth
since the turn of the century.”
A BROADER VIEW OF PRODUCTIVITY
As productivity growth has slowed,
computers have helped to sustain output
as they have become increasingly cheaper
and more powerful.
“We’ve been able to produce more, even
though in a quantitative sense it doesn’t look
like we’re going anywhere,” Quiggin says.
The complexity of 21st century economic
activity, and the challenges to fully measuring
it, make Quiggin sceptical of the search
for a perfect metric to represent “how well off
we are” — and not just how much we produce.
“We need to be looking at a whole bunch
of different things and trying to keep them
in our head, rather than worrying too much
about single numbers,” he says.
The rise of remote work also underscores
why traditional metrics are no longer sufficient,
with newly relevant factors like time saved
on commutes making “any number start
to be less meaningful”, says Quiggin.
“None of that is measured in GDP at all.
Certainly, the time people have saved commuting
to work doesn’t appear, because commuting
time never appeared in GDP in the first place.”
LISTEN
to the full
podcast episode
