What the heck is "productivity" today, anyway?
A question for the economists. Walldon has a post earlier today about Canada’s interpretation of its productivity ranking. This raises a persistent question I’ve had for some time: what does the concept of productivity really mean in an economy that’s mostly services? If a huge accounting or law firm can add an extra professional body to a problem, and get away with charging the deep-pockets client for the additional hours – which it usually can -- has not “productivity” as measured in national economic statistics been increased accordingly? When you are talking production of goods, productivity seems closely correlated with efficiency: one person making more widgets. With services, might it not be just the opposite – or, at least, isn’t the connection broken between those concepts, such that improved measured productivity may or may not mean improved efficiency?
1 Comments:
Good point!
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