Productivity, Product Quality and Workforce Skills: Food Processing in Four European Countries

Geoff Mason, Bart van Ark and Karin Wagner

National Institute Economic Review, 1994, vol. 147, 62-83

Abstract: This article reports on a detailed comparison of productivity, machinery and skills in matched samples of food manufacturing (biscuit) plants in Britain, Germany, the Netherlands and France. In comparing labour productivity levels, explicit account was taken of inter-country differences in the mix of product-qualities as well as differences in physical quantities produced per person-hour. Real (‘quality-adjusted’) productivity levels were highest in the German sample, an estimated 15 per cent on average above those in the Netherlands and France and about 40 per cent higher than in Britain. International differences in quality—as measured by value added per ton—were found to be at least as important as differences in crude tonnage produced per person-hour. The pattern of productivity advantage could not be attributed to inter-country variation in the age and sophistication of capital equipment. However, there were important differences in workforce skill levels which could be linked to both relative productivity performance and the predominant choice of product strategy in each country. For example, in the German industry the mix of initial and continuing training received by employees supports a successful strategy of rapid growth in small- and medium-batch production of elaborate, high value added biscuits which would be hard for the other three countries' industries—and particularly Britain—to emulate. In Britain the greatest success is achieved by large highly-automated plants engaged in the bulk production of relatively uncomplicated varieties of biscuit. Given the present structure of workforce skills in Britain, it is understandable that—as in many other branches of manufacturing—British biscuit producers tend to specialise in relatively low value added goods. However, the study suggests that some of the potential economies of large-scale production are lost due to excessive rates of emergency downtime and the limitations of narrowly-trained employees.

Date: 1994
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