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Catherine l. mann productivity summit 6-7 july 2015_mexico
The document discusses the importance of productivity, noting that while it isn't everything, in the long run it is almost everything. It then provides 3 key points about productivity: 1) It is about working smarter, not harder by better combining inputs through new ideas, technologies, and business models. 2) Productivity growth is crucial for potential growth and increasing living standards. 3) Differences in income per capita across countries reflect labor productivity gaps. It then discusses factors that have slowed productivity growth such as sluggish investment since the financial crisis and how multi-factor productivity will be the main driver of future growth.
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Catherine l. mann productivity summit 6-7 july 2015_mexico
- 1. PRODUCTIVITY: WHY IT MATTERS GlobalDialogue on The Future of Productivity | Mexico City – 6 July 2015 Catherine L. Mann OECD Chief Economist and G20 Deputy … productivity isn't everything, but in the long run it is almost everything. Paul Krugman, 1994
- 2. Productivity is about: Working smarter, not working harder More output by better combining inputs, via: new ideas technological innovations new business models more efficient resource allocation. Productivity crucial for potential growth Productivity: Why it Matters 2
- 3. Potential Growth: Increase livingstandards, make good on promises, repay debt Source: June 2015 OECD Economic Outlook database. Contributions to average annual percentage change of potential GDP per capita
- 4. Income per Capita: differencesreflect labour productivity gaps Percentage differences compared with the upper half of OECD countries, 2013 4
- 5. Labour Productivity: growth slowed,even before the crisis…why? Labour productivity growth since 1990 GDP per hour worked (China and India refer to GDP per worker) 5
- 6. The legacy ofthe crisis: sluggish investment Business investment in different cycles Cyclical peak in OECD real business fixed investment=100 (date of peak indicated) 6 80 90 100 110 120 130 140 150 80 90 100 110 120 130 140 150 t 2 4 6 8 10 12 14 16 18 20 22 24 26 28 t=1973Q4 t=1981Q4 t=2000Q3 t=2008Q1 Quarters since the peak
- 7. Going Forward: MFP themain driver of future growth Contribution to growth in GDP per capita, 2000-2060 (annual average) 7
- 8. A rich traditionof policy-relevant productivity research based on fruitful interaction with both academia and the policy-making community. Recent OECD studies have focused on: 1. Within-firm factors: knowledge-based capital 2. Between-firm factors: resource misallocation – Prof. Hsieh seminal contribution. 3. Institutional arrangements – Prof. Banks tomorrow will address The OECD and Productivity Research 8
- 9. Two key sourcesof MFP growth: 1. Reviving the diffusion machine 2. More efficient resource allocation, especially skills Each of these sources of growth: 1. Depend crucially on public policies… 2. … and can be good for both growth and equity. An OECD Productivity Network opportunity to further our understanding, compare country experiences 9 The Future of Productivity: presenting today’s OECD research