Productivity for prosperity: ‘In the long run, it is almost everything’
November 28, 2016 Editor 0
“Productivity isn’t everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”
— Paul Krugman, Professor of Economics and International Affairs Emeritus at Princeton University and a columnist for The New York Times
Paul Krugman’s conclusion about the importance of productivity is widely shared among economists. Yet productivity growth across the world has been sluggish in recent decades, in both advanced and developing countries, and restarting it is a central priority for the global development agenda.
Taking stock of what we understand about the productivity slowdown, and mapping out potential areas of policy action, was the focus of a recent two-day conference at the World Bank, “Second-Generation Productivity Analysis and Policy.” The conference, co-sponsored by the European Central Bank and the Competitiveness Network, brought together global experts and development practitioners.
“Bringing the most current advice to our clients about accelerating growth” is a top priority, said Jan Walliser, the Vice President who leads the Bank Group’s Equitable Growth, Finance and Institutions (EFI) practice group. “The last 15 years have brought about major advances in the measurement and understanding of productivity growth,” said EFI Chief Economist William F. Maloney. The conference agenda thus sought to “sketch the frontier on the issues that are most relevant” to jump-starting productivity growth in the Bank Group’s client countries.
Productivity in Cambodia’s apparel and garment industry has, in recent decades, enjoyed sustained growth. This photo shows an apparel factory at the Sihanoukville Special Economic Zone. Photo: Chhor Sokunthea / The World Bank.
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