Productivity measurement is an important tool for businesses looking to grow revenue. It’s also used in calculating gross domestic product. With the advent of the computer age, measured productivity may not be showing actual productivity overall. Some sectors, especially those impacted by low-wage job increases, will show what is known as zero-sum productivity. In essence, the impact of automated services is offsetting those services that remain high growth due to the difficulty of automating them. Eventually, it’s theorized, gross domestic product may not reflect and equal human welfare benefit in measuring productivity.
- Production lags are viewed by some economists as indicative of, for example, outmoded infrastructure and out of control regulations.
- Our production model has radically shifted from agriculture to industry and our production stats may be equally outmoded.
- Flat productivity rates can reflect growth of low-paying jobs in one sector and automation overhauls in another, each sector offsetting each other.
“As we get richer, measured productivity may inevitably slow, and measured gross domestic product per capita may tell us ever less about trends in human welfare.”