Productivity keeps increasing for technology businesses

Business leaders in the PricewaterhouseCoopers Technology Barometer did a mighty job of boosting productivity in 2000, particularly in light of a weakening economy in the fourth quarter. And they are projecting an even bigger increase for this year in a highly challenging environment. How are they doing it? If these chieftains are sporting an amulet, it must be a mouse, since productivity gains scored last year by Internet users were 2.7 times greater than those of businesses that have not yet embraced the Net.

2000 was a banner year for productivity in Technology Barometer" businesses, as 69 per cent of their leaders cited a productivity improvement for the year, 12 per cent had no change, only nine per cent had a loss and 10 per cent did not report.

The net productivity gain for the year averaged 11.2 per cent, with more large businesses than small ones noting improvements: 71 per cent versus 66 per cent. Gains were similar for both groups: 10.9 per cent versus 11.4 per cent, respectively. Revenue-per-employee, which is the most often used productivity benchmark, averaged $US288,500 for all businesses studied, including $US347,000 for large and $US232,800 for small enterprises. These businesses have been careful to adjust the size of their workforce to the pace of new revenue growth throughout the year, according to PricewaterhouseCoopers.

Looking ahead, most technology business leaders are projecting equal or stronger productivity gains for calendar 2001. A large number -- 78 per cent -- is projecting higher productivity (a nine-point increase compared to 2000), while eight per cent expects no change (four points less), and only one per cent is projecting a loss (eight points less). The remaining 13 per cent did not report.

Overall, a 13.6 per cent productivity increase is projected for this year (a jump of 2.5 points). Large businesses are estimating a net 12.0 per cent gain (up one point), while small ones are forecasting a 15.2 per cent improvement (up nearly four points).

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