Inclusive Productivity

"The history of productivity is, in essence, the record of man's efforts to rise out of poverty." John W. Kendrick (1961)

This phrase from the eAmerican economist, pioneer in studying and measuring productivity, sums up the spirit of the "Inclusive Productivity" project, IAE Business School and Faculty of Business Sciences of the Universidad Austral, and explains why the topic became relevant. 

Why do we think about inclusive productivity (IP)?

Because we see it as the best path to growth with social progress. Productivity without inclusion is unacceptable, neither politically nor socially. And inclusion without increased productivity is unsustainable. 

Keys to achieving inclusive productivity

  • Invest in human and physical capital
  • to create formal jobs
  • as the central axis of the fight against poverty and inequality


This tripod is also based on the fact that, in Argentina, development policies have not been effective and the efficiency of the use of production factors has fallen. In this regard, it clearly emerges from the new wave of productivity studies, especially those conducted by Nicholas Bloom (https://nbloom.people.stanford.edu/) and its collaborators, that investment in human capital must crucially include the improvement of the quality of 
management of companies, given its determining role in productivity and exports. IP is therefore not only a matter of State, It is also the responsibility of companies and their workers. 

Policies for inclusion

State Productivity

The public sector must cease to be a black box and, fulfilling its part of the fiscal contract, must publish an annual report at all three levels of government showing its production and productivity. Between ministries, secretariats, and undersecretariats, the national government has 274 agencies, in addition to some thirty advisory boards. An inexplicable volume, contrary to productivity and the inclusion of the most needy. 

Despite INDEC's progress, information still needs to be substantially improved. One example is correcting the underreporting of income in household surveys, which underestimate inequality and overestimate poverty, without denying the seriousness of both evils in Argentina today. 

Like no other, this investment contributes simultaneously to productivity and inclusion and is the core of IP in a country like Argentina. Possible instruments include a new educational financing law, linked to goals; strengthening the fight against educational inequality, with rich schools offering extended school days for the poorest; continuing census assessments, with results returned to educational communities for school improvement; a new teaching contract, with incentives for achievement, optional for those currently teaching and mandatory for new entrants; specialization of teacher training institutes; prioritizing job preparation in primary, secondary, tertiary, and vocational education; promoting more vocations in the hard sciences and technologies; at the higher education level, informing students about the prospects of their chosen professions (this was only done in 2000); improving coordination with secondary education; Increase the number of scholarships, funded by a tax on graduates (as in Entre Ríos or Uruguay) and continuously improve their relevance, grounding, and importance, identifying vacant areas by region. 

Argentina needs to invest in capital physical no less than 20% of GDP (gross domestic product), 6 points or $25.000 billion more than in 2020. The increase will be gradual However, to achieve this, a clear and agreed course for the country and predictability are essential, which requires legal security protected by an independent judiciary, issues that remain unresolved in Argentina. Without an increase in isa nature It will not be possible to reduce unemployment, informal employment and poverty. 

Investment in science and technology, based on a new strategic plan and with increasing allocations to priority areas. Together with a clear direction for the country, this could help reduce the brain drain that has been affecting us erratically for decades. 

To achieve this, private investment must increase productivity by increasing employment. One important way to achieve this is to lower non-wage labor costs, which in Argentina are two-thirds higher than those in developed countries. This would facilitate the formalization of many workers, which is essential for private investment. It is also essential to replace permanent social programs, except for the AUH (Undergraduate Employment Development Program), with personalized job training and subsequent access for their beneficiaries to formal employment. 

In Argentina pre-Covid Malnutrition was much higher than undernutrition. This problem would improve if the current food card had larger discounts for the most nutritious foods. Health is another essential component of inclusion. Access to it could be gradually facilitated with universal coverage and a financial solution for the very complex PAMI program. 

Increasing investment requires reducing the extremely high tax burden that penalizes production and exports. Until fiscal space is recovered to reduce it for all taxpayers, quotas for the planned reductions can be bid out, granting them to those who commit the most investment and generate the most employment and foreign currency per pound of reduced taxes.

Another way to encourage investment and exports is to gradually integrate the Argentine economy into the world, making tariff protection contractual, with magnitudes and terms depending on the investment commitment and the trade agreements Argentina achieves.

The country still has a sufficient human capital base with the potential to diversify production and exports by creating skilled jobs. The new law could be improved, for example, by including all economic activities that generate jobs for scientists, professionals, or technicians, or that patent discoveries.

The pending agenda of the IP project includes the challenges that hinder the full realization of women and minorities, for example, in the labor market; as well as intergenerational inequalities, especially in social security and environmental inequalities, both of which have been largely neglected. The essential issue of decent housing and habitat is also pending.

Companies and workers

In a mixed-economy society like ours, IP requires the cooperation of workers, entrepreneurs, businesses as organizations, and the State. Some predict that a new socioeconomic institutional framework will emerge in the post-pandemic era. We don't know, but we see it as unlikely. What is certain, however, is that IP not only requires much better quality public policies. It also requires a renewal of businesses, the quality of their practices, and the integration and participation of workers, in order to build business organizations that contribute more and better to inclusive productivity.
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