In search of productivity
A new measurement
of productivity for our age
Explore the Strategy& Potential Productivity Index, a comprehensive approach to productivity that considers a broader range of pillars impacting productivity than traditional measures. It includes: labor, physical, social and natural capital, technology, and institutions. With this new framework, GCC countries can unlock more than USD 2.5 trillion dollars in additional GDP over the next decade from the resulting productivity enhancements implied by this index.
Learn more about our framework
Country scorecard
Quantify a country's productivity potential. on your country's productivity
See how your country performs
Productivity policy simulator
Assess the impact of policy changes on your country's productivity potential.
See how your country can do better
Introducing a new
productivity framework
The Productivity Potential Index addresses gaps in current measurements by recognizing the importance of productivity growth amidst long-term challenges such as climate change, social shifts, and health crises. Explore our expanded measurement of productivity that includes environmental and social factors alongside labor, capital, and technology. Let's reimagine productivity together to make better strategic decisions and create a sustainable future.
Traditional measures
of productivity
Productivity rests on the three foundational pillars of labor, physical capital and technology. However, traditional measures of productivity do not include dimensions which we believe are critical for our age.
Why productivity matters?
Why productivity matters?
Labor and human capital
Physical capital
Social capital
Natural capital
Innovation and intangible capital
Institutions
Adding new dimensions to traditional measures of productivity
Accurately defining and measuring productivity in modern economies is critical for growth and competitiveness. Our analysts have reviewed the evidence and added new dimensions and inputs to create a new, enhanced productivity framework.
Why redefine productivity?
Why redefine productivity?
Labor and human capital
Physical capital
Social capital
Natural capital
Innovation and intangible capital
Institutions
Unlocking the productivity potential
The Productivity Potential Index recognizes the importance of long-term challenges and trends — such as climate change, societal shifts and healthcare concerns — on growth, competitiveness and living standards, thus creating a more holistic evaluation of productivity for each country.
Our Productivity Potential Index
Our Productivity Potential Index
Labor and human capital
Health
Education
Demographics
Physical capital
Capital stock
Capital deepening
Social capital
Trust
Natural capital
Living natural capital
Non-living natural capital
Emissions
Innovation and intangible capital
Technology diffusion
Innovation potential
Institutions
Institutional quality
Equity
Key insights
This first edition of the Productivity Potential Index covers 25 diverse economies and highlights the need to adopt a holistic approach to productivity. Four key insights emerge from our research:
New policies are needed to fully unlock productivity
A country’s approach to unlock its productivity potential needs to be anchored in multidimensional policies that target different productivity pillars.
Traditional productivity pillars matter, but they are not the entire story
New pillars of natural capital, social capital, and institutions are significant determinants of productivity, and reforms targeting these new pillars can increase a country’s productivity.
Drivers of productivity differ from one country to another
Every country's ambition to increase its productivity is distinct, mirroring its individual strengths and challenges. The Productivity Potential Index explores these drivers for every country we have analyzed.
Machine learning analytics offer a nuanced understanding of productivity drivers
The Index leverages machine learning techniques to deconstruct and analyse the importance of productivity pillars for each country. This enables the creation of a tailored policy agenda.
Why productivity matters?
Productivity acts as a catalyst for economic growth, enabling nations to produce more with the same resources. It plays a crucial role in bolstering employment opportunities, leading to better livelihoods and improved economic conditions for individuals at the household level and across the nation. Productivity also contributes to sustainable and equitable development, benefiting not only the economy but also the overall well-being of the population. Productivity levels, historically, have correlated with increased earnings at the household level and better livelihoods at the national level.
Thus, understanding the levers that impact productivity is critical for policy makers to achieve their public policy objectives, whether these pertain to investments in education, advancements in technology, infrastructural enhancements, or regulatory reform. Such policies, in turn, can effectively bolster productivity growth, steering nations towards sustainable economic development and achieving desired public policy objectives.
Why redefine productivity?
Traditional measures of productivity relied on by economists and policymakers to explain a country’s economic performance include total factor productivity (TFP) and labour productivity. TFP focuses on the efficiency with which inputs (such as labour and capital) are used in the production process to generate output. Labour productivity is measured as the output per hour worked.
However, such traditional measures have significant shortcomings:
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They do not distinguish between growth that creates higher or lower environment impact.
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They ignore many of the capital assets that determine an economy’s productive capacity, such as health, social capital, and environmental factors including water use and biodiversity.
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They fail to measure the quality of institutions.
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They do not provide a forward-looking view that can inform policy making.
Our Productivity Potential Index
Three fundamental criteria underlie our Productivity Potential Index (PPI):
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First, that economics and economic statistics must account for all the assets on which societies rely, including human, natural, social, physical, intangible and institutional capital.
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Second, that a productivity analysis can and should incorporate the value of production externalities, including environmental and social change.
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And third, that forward-looking economic indicators are needed to help guide policy.
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