Return to Productivity

Why important for individuals

  • Productivity improvement has not only increased incomes but also released more discretionary income to buy non-basic stuff – goods and services that people ‘like to have’ on top of those they ‘must have’

  • The result is G7 office workers and carpenters, teachers and taxi drivers, all earn on average so much more than they do in India or Africa, say

  • It has also had an enormous impact on most people’s lives

  • In the middle of the last century, over 40% of G7 family expenditure went on food and clothes – today, it’s only 10 to 15% for such basics 

  • Economist Robert Gordon recalled: “Not a single urban home was wired for electricity in 1880, but by 1940 nearly 100% had mains power, 94% had clean water, 80% had flush toilets and 56% had refrigerators”

  • Now, thanks to continuous productivity improvement, what once were luxuries only a few could enjoy – albeit in developed nations – have now become affordable necessities for the many

  • Equally, they also enjoy longer and healthier lives



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