Question

what have we learnt from the major studies of the critical role of productivity in economic growth?

Answer 1

Answer:
Productivity has very critical role in the economic growth of any economy. Few of the points which justifies the same is mentioned below:

• Economic productivity in simple terms means greater output from the same amount of input. This will lead to increase in Gross Domestic Product (GDP) and overall economic output of the country. This will lead to economic growth as well which will improve the economy and participants of the economy.
• Scaling with improvisation of productivity is very easy : Scaling of growth and producing more output with productivity is an efficient way to scale. We don't have to think in terms of horizontally scaling our business by opening new plant, its functioning and hiring more workers, with the help of improved productivity we can produce more goods and services without opening new plants.
• Involvement of Technology in improvising productivity and economic growth : Technology plays an important role in increasing productivity of an organization and economy. For instance take the case of preparing clothes, with hands we have limited output that we can produce for a given amount of human capital but with the introduction of technology like conveyor system same amount of human capital with similar input can produce 10 times more output which can increase the profit of organization and economy by multi fold.
• Resources in a particular economy is limited post that productivity is the only option to go forward : A particular economy have limited amount of resource that it can use for its growth post that increasing the productivity is the only way to increase the growth of the economy.
• Productivity leads to more profit to business which attracts foreign investment in the economy as well : Increase in productivity leads to higher profit to the organization which attracts foreign investment in the economy as well leading to further growth.
• Limited human capital : For a particular country it has limited human resource and to efficiently utilize them to increase economic growth productvity is the most important factor.

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