WHOM THE rEALISTS WOULD HAVE US FEAR THEY FIRST OVERESTIMATE:

Why Is Russia's Productivity So Low?: Russian companies are still among the least productive in the industrial world, but the downturn could provide a catalyst for big improvement (Jason Bush, 5/08/09, Business Week)

According to one of the studies, by Strategy Partners, a Moscow management consultancy, Russia's average labor productivity is just 17% of the U.S. level. The amount varies by sector, from a low of 6% in machine building to a high of 22% in the natural resource industries. But the room for improvement is colossal everywhere. "If, in Russia, a mere 10% of workers had the same level of productivity as in the U.S., Russia's GDP would increase by one and a half times," notes Alexander Idrisov, managing partner of Strategy Partners.

Similar conclusions have been reached by the U.S. consultancy McKinsey, which has also just published a report examining Russian productivity. McKinsey, which focused on six sectors, concluded that Russian productivity was around 26% of the U.S. level. That's an improvement on 10 years ago, when McKinsey estimated Russian productivity at 18% that of the U.S. But widespread inefficiencies remain. For example, it takes three times as many workers to produce a ton of steel in Russia as it does in the U.S.

Russia's productivity looks bad even in comparison with other emerging markets. In 2007, the World Bank estimated that revenues per worker in Russia were only around $7,000 per head per year. That's around 20% lower than in India, and 40% lower than in China. The figure is especially troubling when you consider that Russia's labor costs are about double the level in either India or China.

Why would a people who believe in nothing, have no children and die early choose to be productive at work?

Posted by Orrin Judd at May 9, 2009 9:03 AM