Canadian Manufacturing: A Study in Productivity and Technological Change, Vol. I, Sector Performance and Industrial Strategy. Vol. II, Industry Studies 1946-1977

Robert W. Sexty is a commerce professor at the Memorial University of
Newfoundland and author of Canadian Business: Issues and Stakeholders.

Uri Zohar, professor of economics in the Faculty of Administrative Studies, York University, has analyzed the productivity of labour and capital in 19 Canadian manufacturing industries in an attempt to explain their persistent lagging productivity growth and to find a prescription for an industrial strategy that would address this problem. The study, sponsored by the Canadian Institute for Economic Policy, is in two volumes: Volume I contains theoretical material and general conclusions; and Volume II contains the supporting data by industry.

The study concludes that the problem of declining productivity growth relates more to inefficiencies of capital than of labour. The author argues that the capital stock of some industries is depleted and technologically outdated. There is an opportunity to stimulate productivity through technological innovation, but a systematic method is needed for selecting where investments in technology should be made. An industrial strategy should select promising industries determined by the policy objectives of government (employment, economic growth, or rising labour efficiency). The result should not be one master strategy, but instead strategies designed for each industry.

The author uses econometric analyses involving four estimates of productivity. Much has been written on this topic, mostly based on qualitative instead of quantitative data. This study is one of few using time series statistics, and the author claims it is the only one using more than a 20-year period. The two relatively short volumes, 160 and 212 pages respectively, are packed with supporting data (over 130 tables and 80 figures). There is no bibliography, but Volume I has footnotes.

The volumes do contribute to a greater understanding of longer term productivity, which is important to the domestic and international competitiveness of Canada’s manufacturing industries. Productivity is a complex concept and, though the volumes are well written, with background and explanatory materials, readers should have a knowledge of economics to fully appreciate the study.