-
-
The OECD Compendium of Productivity Indicators 2024 sheds light on recent developments in labour and multifactor productivity across OECD countries, looking at their key components and putting those developments into a historical perspective. It also offers granular productivity insights, based on industry composition and differences between SMEs and large firms.
-
Developments in productivity have become more and more uncertain, as several shocks, including the COVID shock, the energy crisis, and more recently heightened geo-political tensions hit economies, with potential long-term scarring effects for some of them (OECD/APO, 2022[1]). This has added to long-term trends such as population ageing, declining competition and stalling globalisation, which can also hamper productivity developments. At the same time, digitalisation, Artificial Intelligence and the transition to a green economy offer opportunities to revive productivity growth (OECD, 2023[2]). Getting preliminary insights on most recent developments in productivity growth is thus useful to inform policymaking, identify policy needs or monitor the effects of policies.
-
-
-
This chapter builds upon the research presented in the 2023 edition of the Compendium of productivity indicators, on within-industry labour productivity developments and between-industry reallocation of hours worked during the first years of the COVID-19 pandemic. It incorporates information up to 2022.
-
Developments at aggregated industries levels can mask heterogeneity in productivity among firms within the same industry. For instance, it may be interesting to look at the contribution of small and medium-sized enterprises (SMEs). In several countries, a considerable number of low-productivity firms (many of them small firms) coexists with large firms that are highly productive and exposed to international competition. Productivity tends to increase with firm size, as large firms can benefit from increasing returns to scale. Firm-level productivity also depends on the industry enterprises are operating in. In addition, large firms tend to adopt new technologies more than small firms, unless the latter are new or younger companies.
-
Breaking down investment and capital by asset type helps to better understand the main drivers of GDP and productivity growth. For example, it allows assessing the state of infrastructure and the volume of investment in growth-enhancing technologies, such as information and communication technology. Moreover, different asset types contribute in different ways to GDP and productivity growth. As explained in Chapter 4 Productivity and Economic Growth, capital services are the appropriate measure of capital input in productivity analysis and their measurement depends on the composition of the capital stock.
-
Employers’ ability to raise wages and other forms of labour income depends on increases in labour productivity, highlighting the welfare implications of productivity growth and its role as a key driver of long-term living standards. Several OECD countries have experienced a slowdown in productivity growth and in real average wage growth. Empirical evidence points to a decline in labour income shares since the mid-1990s in the majority of OECD countries, at least when measured from a producer perspective with gross income as a reference (Cho, 2017[1]). These developments have resulted in a decoupling between labour productivity and real labour income growth (Schwellnus, 2017[2]).