Assessing Deloitte’s “Shift Index”: great relevance for any operational manager

Deloitte’s Center for the Edge has unveiled new industry-specific data that suggests that, despite major improvement in labor productivity over the last four decades, many U.S. industries have experienced alarming decreases in their return-on-assets (ROA).  

 

Deloitte’s “Shift Index,” a new economic indicator, reveals that the current economic downturn is masking much deeper long-term trends.  It also underscores that there is a disconnect between productivity improvement and increased asset profitability.  Deloitte has labeled this the ‘performance paradox.’

 

The underlying issue is that while we are adopting the nation’s new digital infrastructure two to five times faster than previous infrastructures such as electricity, railroads and telephone networks, most of our institutions and practices are still geared to earlier infrastructures.  As a result, increased productivity gains fail to translate into profit.

 

While virtually every industry that Deloitte examined has been impacted, the first wave of industries currently feeling the most pressure include technology, media, telecommunications and automotive.  They also represent a ‘canary in the coal mine’ for industries that have just started to feel the effects of the Shift Index, including banking, retail and insurance.  Finally, the report also reveals that heavily-regulated industries like healthcare and aerospace & defense are the most insulated, at least for the moment.

 

Deloitte Shift Index: Advances in Labor Productivity Fail to Drive Profit [gigya width=”477″ height=”510″ src=”http://static.slidesharecdn.com/swf/ssplayerd.swf?doc=deloitteus2009shiftindex11102009-091110134232-phpapp01&stripped_title=deloitte-shift-index-advances-in-labor-productivity-fail-to-drive-profit” quality=”high” flashvars=”gig_lt=1258433292890&gig_pt=1258433313328&gig_g=1&gig_n=wordpress” wmode=”tranparent” ]
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