Wal-Mart’s impact on the overall U.S. economy goes farther than most people ever imagine, according to the McKinsey Global Institute. Wal-Mart’s managerial innovations contributed mightily to the big increase in American productivity in the late 1990s an increase most observers attributed to high-technology companies.
“Rather, managerial and technological innovations in only six highly competitive industries wholesale trade, retail trade, securities, semiconductors, computer manufacturing and telecommunications were the most important causes,” according to the McKinsey Quarterly study.
Business analysts admire Wal-Mart’s logistics management the moving and stocking of goods and tracking how busy cashiers are, so they can be used elsewhere during slack times. As competitors adopt these innovations, overall productivity is further enhanced.
European analysts still see productivity gains in the U.S. as having been high-tech driven and gear their policies to encourage high-tech development. But once they realise how important innovations are in the retail sector, they may want to rethink their anticompetitive retail policies such as restrictions on property use, shop hours, and what can be sold by whom.
Source: Virginia Postrel (author of “The Future and Its Enemies), Economic Scene: Lessons in Keeping Business Humming, Courtesy of Wal-Mart U., New York Times, February 28, 2002; U.S. Productivity Growth, 1995-2000, October 2001, McKinsey Global Institute.
For text http://www.nytimes.com/2002/02/28/business/28SCEN.html
For the McKinsey study
http://www.mckinsey.com/knowledge/mgi/feature/index.asp
For more on Productivity and Growth http://www.ncpa.org/iss/eco/
FMF Policy Bulletin\5 March 2002
