Well, if I knew all the answers to that, I think I would be either a hero or I'd be rich--one or the other. Sorry, we don't know all the answers. This is very hard work as you plow through it.
When we appeared a year ago, we thought we were getting back on track to a long-term productivity gain of about 1.75% per year. We thought so, because we had seen a substantial pickup in investment in machinery and equipment, which is generally a precursor to higher productivity. We thought that a fair bit of adjustment had already taken place. An adjustment, while you're going through that, is actually a negative for productivity.
When we looked at it again in September, as we were preparing this report, we saw two things. First of all, the numbers weren't coming through as strongly as we thought, in spite of the fact that we made more investment in machinery and equipment. Secondly, the adjustment process was clearly more protracted than we had anticipated. For that reason, we said we were maybe a bit too optimistic last year and that we would go back to 1.5%, which is what we had been assuming in the earlier part going forward. For the next couple of years, we still have potential for 2.8% rather than 3%.
Now, it may just be that the adjustment period is more protracted. Certainly if you had to place odds, that is it. We do know that during periods of adjustment, the productivity numbers end up not showing as good a performance.
That having been said, however, and especially since an increasing share of employment is going to be in the services sector--I mean, compared to the United States we have a rather low share in the service sector at the moment--clearly we have to put real emphasis on ensuring that our services sector, which is everything from financial services through to the hospitality sector, community services, health services and so on, is as efficient as possible. It's in that area that I think we're going to have to put more emphasis going forward.
Now, as to what to do, I can't give you any more answers than the ones we talked about earlier.