Return to National productivity plans

National productivity measures

  • There are three measures of national productivity on offer from the UK’s ONS – Office for National Statistics

  • Output per hour worked – the most popular measure:

    • Reflects the international differences in hours worked, holiday entitlements and the flexibility of the labour market including part-time and other alternative work patterns

    • More relevant to time than results-based work

  • Output per worker – the main alternative measure:

    • Simplest to calculate because internationally consistent definitions of output and employment figures are readily available

    • More relevant to results-based work

    • If people work longer hours, productivity can appear to increase

  • Output per person of working age – an also-ran measure:

    • Shows how well a nation uses all its workers, actual and potential, in productive employment

    • But many potential workers may be unemployed or under-employed

  • N.B.  All the above are partial productivity measures – they only cover labour productivity  – the productivity of material, capital and knowledge resources are not measured

Outputs – GDP

The outputs of any nation are the many different products and services produced by its many different sectors The only way to measure them all together is to convert them all into a single measure of total economic activity – Gross Domestic Product GDP is variously defined as: The value of all final goods and …

Inputs – Labour – Hours of work

The UK labour force works comparatively long hours on average compared to most other G7 nations Some argue that people in the UK should work even more hours per year on average – others call this a retrograde step, saying the longer term aim should be to reduce working hours per person Overall, the trend …

Inputs – Labour – Quality

National economic futures depend on how well nations develop the knowledge and skills of their people: China and India already produce over 5 million graduates every year Shanghai topped a recent OECD test for reading, maths and science for 15-year-olds, America was 17th, Britain a lowly 25th The key is to get the right mix …

Inputs – Materials & Energy

The UK once had the good fortune to be rich in natural resources – plentiful supplies of coal, iron ore, wool and grain, at least until better alternatives were found abroad We also had an empire from which to import other basic resources like cotton and rubber More recently, North Sea oil and gas were …

Inputs – Capital

The UK currently invests a smaller percentage of its GDP than any of its G7 competitors except the USA yet capital investment is said to be ‘the lifeblood of economic growth’ The more you invest, the more national productivity tends to rise, unit costs fall, competitiveness rises, sales rise and wealth, jobs and tax-take increase …

1 comment

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