Question

During recent decades, the rate of increase in the output per hour in the United States has been lower than in the early 1960s. This development has caused enormous concerns in Washington and elsewhere. In recent years, some observers have asserted that the productivity slowdown has been due in part to a decline in the rate of innovation in the United States. Have you seen this trend in your industry? If so, identify the cause and effects. If not, what innovations have you experienced?

Answer 1

I’d say no. These type of trends have not been experienced by me. Output per worker has always been upgrading and falling everytime. Still, there are a number of innovations that are being introduced in order to help the organisation grow and the same has been adopted by almost every company.

Since early 20^th century, henry ford has been promoting the first phase of Fordism. There was a major shift from manual production to the automated production. It lead to more specialized and decentralized spirit. There was also technical division of labour in order to achieve the simplified and routinized work. There was this mass production of goods that started happening which achieved the ‘economies of scale’. Rationalization was achieved. This led to increase in output per worker in the industry.

As soon as technology improved, mass production was not satisfying anyone. People wanted diversity in the range of products. This led to another phase of innovation. Under this, flexible methods of production were promoted. The focus turned to small and medium scale production with huge specialization, diversity and product diversity. Polarization of skills were seen among the workers under this phase. Some of the key features that came in with the innovation were clean technology, differentiated markets and horizontal networks within the organizations. This all helped grow the organizations and economy with the rise in output per worker.