Productivity — output per hour worked — rarely makes headlines. Yet over decades, it is the main reason living standards rise. An economy can grow by adding workers, but it gets richer per person only by producing more with each hour.
What drives it
Investment in equipment and technology, better skills, improved management and more efficient allocation of resources all raise productivity.
Why it can stall
Weak investment, slow diffusion of new technology and barriers to competition can hold it back even when individual firms innovate.
Why businesses should care
Rising productivity supports higher wages without eroding margins. For companies, it is the difference between growth that is shared and growth that is squeezed.
Key takeaways
- What drives it
- Why it can stall
- Why businesses should care
