A new OECD publication
The "Future of Productivity" foreword sees productivity to be "the ultimate engine of growth in the global economy. Raising productivity is therefore a fundamental challenge for countries going forward. This new OECD report on The Future of Productivity shows that we are not running out of ideas. In fact, the growth of the globally most productive firms has remained robust in the 21st century. However, the gap between those global leaders and the rest has increased over time, and especially so in the services sector. This implies that knowledge diffusion should not to be taken for granted. Future growth will largely depend on our ability to revive the diffusion machine, both within and across countries. At the same time, there is much scope to boost productivity and reduce inequality simply by more effectively allocating human talent to jobs."
According to this, structural obstacles to the diffusion of productivity, innovation and best practices knowledge are a key factor to low firm productivity. For more effective diffusion four items seem to be of special importance:
- global connections need to be extended;
- firms, especially new entrants, should be able to experiment with new technologies and business models;
- economies need to make the most of scarce resources by enabling labour, capital and skills to flow to the most productive firms;
- we need investment in innovation including R&D, skills and organisational know-how to enable our economies to absorb, adapt and reap the full benefits of new technologies.
The publication consists of four main chapters, dealing with (I) past and future of productivity, (II) thinking about productivity, (III) enhancing productivity in a globalized world, and (IV) the role of public policy.
One may object some of the ideas - e.g. the reforms proposed to reduce employment protection schemes or the naïve evocation of well-functioning markets in a global environment of big corporation-dominated ones. It submits some significant methodological improvements and gives a broad overview of how productivity can be increased.
OECD (2015) - The Future of Productivity. Paris: OECD.
(The Future of Productivity – preliminary version © OECD 2015)
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