"Productivity tells us two main things about what an economy can provide. Its absolute level tells us how wealthy we are today. Its pace of change tells us how much wealthier we could be tomorrow.Increasing productivity means an increasing amount of goods or services produced in a given time. A doubling of productivity should mean a doubling of wealth as expressed in double the volume of units produced....The power of productivity is enhanced because its growth is cumulative: productivity growth begets more productivity growth. It generates the extra resources that can be devoted to the next round of productivity-enhancing investments. Also more productively created, lower-cost goods or services feed back into production by stimulating productivity improvements to bring costs down in other areas....Unfortunately this virtuous cycle turns into the opposite when productivity slows: weak productivity also becomes self-reinforcing. Productivity sclerosis also diffuses."
"Complementing the technological upgrading of existing businesses, sustained productivity growth therefore requires having a sufficient degree of turnover of businesses. Healthy business dynamism, in the sense of businesses closing and opening, is necessary to facilitate a continuing shift of resources from low productivity to higher productivity areas. Unless resources of people and capital can move out of less productive areas to allow more productive ones to establish and expand then economy-wide productivity languishes."
E mais à frente:
"the major economic problem of the Long Depression is not an absolute disappearance of investment and innovation but the wider economic atrophy that hinders their spread. When too many resources are stuck in low productivity areas and in zombie businesses - businesses that are too weak to invest in their underlying operations but have enough income from somewhere to survive - then the potential for the wider positive impact of particular innovative business investments will be frustrated."