The Future of Productivity

This report examines the productivity growth of the most globally productive firms, which has remained robust despite a slowdown in overall productivity. The increasing gap between these global frontier firms and others suggests challenges in technology and knowledge diffusion, indicating that future growth will depend on reinvigorating these diffusion processes. The book identifies structural impediments to productivity growth, such as a decline in business startups, slowing knowledge-based capital accumulation, and inefficient resource allocation due to barriers to scaling up and high rates of skill mismatch. Policies that facilitate resource reallocation, including effective product and labor markets, judicial systems, bankruptcy laws, and housing policies, are crucial. Additionally, enhancing public funding and the organization of basic research is increasingly important, and innovation policies should be designed to balance support for applied and basic research and to avoid favoring incumbents over young firms.

(Generated with the help of GPT-4)

The research method used in the report involves analyzing micro and industry-level data to understand the productivity dynamics of firms and the impact of various structural factors and policies on productivity growth. The method includes examining the productivity gap between global frontier firms and other firms, identifying structural impediments to productivity growth, and assessing the effectiveness of different policies in facilitating knowledge diffusion and resource allocation.

(Generated with the help of GPT-4)

The report highlights the importance of knowledge diffusion for productivity growth and identifies structural impediments such as declining business startups and inefficient resource allocation. It emphasizes the need for policies that support resource reallocation and innovation, including effective markets, judicial systems, bankruptcy laws, and housing policies. The report also stresses the need for improved public funding for basic research and balanced innovation policies that do not disproportionately favor incumbents or applied research over basic research.

(Generated with the help of GPT-4)

Categories: English publication language | bankruptcy laws | basic research | business startups | economy | employment | global frontier firms | growth | housing policies. | human capital | human development | innovation | innovation policies | judicial systems | knowledge-based capital | knowledge diffusion | productive model | productivity | productivity growth | public funding | reallocation-friendly policies | research | research and development | resource allocation | scaling up | skill mismatch | structural impediments | technology