Productivity measures output per unit of input. It is usually calculated as output per worker or output per hour worked. A worker who produces 100 widgets a day is more productive than one who produces 50. A country with high productivity can afford higher wages and better public services.

Productivity grows through better tools, better skills, and better organization. A farmer with a tractor outproduces one with a hoe. A programmer with modern software outproduces one writing code by hand. Education, training, and technology all raise productivity.

Slow productivity growth is a problem. Wages stagnate. Living standards stop improving. Economists debate why productivity growth has slowed in many rich countries since the 1970s. Candidates include aging populations, less disruptive innovation, and the difficulty of measuring output in service industries.

How to raise it

• Invest in education and training
• Adopt better technology
• Improve management practices
• Build reliable infrastructure
• Encourage competition