"Raising labour productivity"

"one problem fills the screen: the country’s anaemic growth rate. A healthier economy would raise people’s living standards; faster growth is the way to square the circle between lower taxes and better public services. Yet the oecd, a club of rich countries, reckons that only heavily sanctioned Russia will fare worse in the g20 in 2023. And whereas average annual gdp growth over the decade preceding the 2007-09 financial crisis was 2.7%, the Office for Budget Responsibility (obr), a fiscal watchdog, predicts the new normal is closer to 1.7%.

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Zoom out again, and it is clear that Britain’s growth problem is long-standing and getting worse.

In the coming months we will publish a series of articles on how to get Britain growing again. But first it is vital to understand how bad things are. That means focusing on one issue—productivity.

Over the long run productivity growth, or the ability to produce more with less, is all that really matters for rising living standards. Although in theory economies can grow when people work longer hours, at some point that strategy is limited by employees’ health and the number of hours in a day. Raising labour productivity, or the amount workers can produce in an hour, can happen with investment. Or it can happen with greater total factor productivity (tfp), a measure of the overall efficiency with which capital and workers are used. tfp can be traced to factors like better management practices or stiffer competition."

Trechos retirados de "Britain’s productivity problem is long-standing and getting worse"