Opinion: As politicians and economists search for answers to Australia’s productivity woes, Lauren Ryder argues the real problem may be how we measure work in a modern economy.
Every few months, a new set of productivity figures lands and the political handwringing begins. We are told that GDP per-hour-worked has flatlined and that multifactor productivity is declining. Apparently, we’ve slipped to 18th place in the IMD World Competitiveness Yearbook, behind economies we used to lead.
Economists circulate papers. Ministers convene roundtables. And the same conclusion emerges: Australian workers need to do more.
But what if we’re asking the wrong question entirely. What if the workers are already doing more, and we just can’t see it?
We’re measuring the wrong economy
Australia’s economic centre of gravity has shifted in recent times. The industries that now employ most Australian workers – we’re talking services, healthcare, education, professional services and public administration – are almost entirely invisible to the productivity frameworks we still use to evaluate national performance.
Those frameworks were built for a different economy. They were designed to count the things that could be counted: tonnes mined, units manufactured, widgets moved off a line. The sectors where GDP-per-hour-worked does what it claims, such as mining, manufacturing, agriculture and utilities, employ around 16 per cent of the Australian workforce. The other 84 per cent work in sectors where the framework is less effective at capturing the full value of work performed. These frameworks are not designed to measure insight, care, judgement, or change, which happen to be the primary outputs of most of the Australian workforce in 2026.
The ‘phantom labour’ phenomenon
I call this gap “phantom labour”. It’s the work that is real, valuable and unrelenting, but structurally invisible to the metrics we use to measure it.
It shows up in the nurse who takes the time to properly explain a discharge plan, reducing the likelihood of re-admission and the $5,000 cost that comes with it. It’s the teacher who identifies a struggling student early and intervenes, keeping that child in the system and off a far more expensive remediation pathway.
It is the consultant who synthesises six months of fragmented research into a single conversation that steers a client away from a costly strategy. Or it could be the leader who holds a team together through a difficult restructure so that the organisation doesn’t haemorrhage institutional knowledge and the recruitment budget that goes with replacing it.
None of it shows up cleanly in GDP per hour worked, and yet all of it is holding the Australian economy together. A broken ruler, perhaps. But not a broken workforce.
Meanwhile, the official statistics record productivity as falling in the very sectors where this work is most concentrated. We look at those numbers and may conclude that teachers, nurses, and knowledge workers are underperforming. But that conclusion is almost certainly wrong. When you measure an artisan economy with a factory ruler, the artisan will look inefficient every time.
I think about this every time I hear a politician suggest that the solution to Australia’s productivity problem is to get people back into offices five days a week. The assumption is that physical presence equals output. It’s an assumption rooted in a manufacturing-era understanding of work that doesn’t apply to what most Australians do.
What leaders should be measuring instead
If the national frameworks are lagging, then the responsibility falls to leaders inside organisations. But the irony is that most business leaders are also measuring the wrong things.
They track attendance, activity and hours logged (the proxies of presence) rather than quality of decisions or depth of client impact. They measure inputs when they should be measuring outcomes.
The leaders I work with who are genuinely closing this gap have made a deliberate shift. They’ve moved from counting what people do, and how often they do it, to evaluating what people produce. They’ve invested in building clear definitions of what excellence looks like in knowledge-work roles. And they’ve stopped treating invisible work as less “real” simply because it’s harder to quantify.
Organisations that can’t measure the work their people actually do can’t reward it, develop it or scale it. They’re flying blind on the most important asset they have.
The measurement crisis is the productivity crisis
I’ve spent years working alongside leaders and teams inside organisations navigating significant transformation, and I see the opposite of disengagement. I see people doing more with less, absorbing greater complexity, managing constant change, and doing it all while the official data registers a flat line.
The gap between what Australian workers produce and what our frameworks can see has been widening for years. Until we close it by developing richer measures of output that capture quality and impact, we will keep having the wrong conversation.
We have a measurement problem. Let’s at least name it correctly before we decide how to fix it.
Lauren Ryder is the founder and CEO of Leading Edge Global, a leadership consultancy specialising in AI transformation, culture, and organisational capability. She is a regular contributor to Forbes Australia.
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