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Abstract
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This research, conducted during the COVID-19 pandemic from 2019 to 2023, provides a comprehensive view of how innovation and traditional elements influence total factor productivity (TFP) in 22 Iranian water and wastewater utilities. The study highlights how the pandemic changed the productivity dynamics and shows that traditionally relied-upon drivers of productivity, which had previously been effective, became less useful during this unique period. The analysis revealed that the most significant changes in TFP stemmed from the implementation of mandatory innovative business models. We identified three key approaches that played critical roles in enhancing productivity: digital technologies, remote working, and customer-focused strategies. A central takeaway from this study is that for water utilities to achieve long-term productivity gains, they must invest in enhancing the knowledge and skills of their workforce, particularly by fostering an environment that encourages continuous innovation. This can be accomplished if utilities commit to a sustained digital transformation strategy, investing in the digital competencies of their employees and providing them with the necessary tools to adapt in an ever-evolving landscape. Investments in human resources, particularly those related to innovation strategies, will lead to improved productivity within utilities and their organizations. Given the volatility of the future, organizations that invest in their human resources are better positioned to face uncertainties with greater resilience. The findings suggest that for water utilities to successfully navigate the post-pandemic environment, they must strike the right balance between traditional productivity drivers and innovative initiatives to enhance their productivity and operational performance.
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