Productivity is the key to sustainable growth

Productivity in China is twice the indian one. In Dubai or in Saudi Arabia is 0, (Source FT).

Productivity is the key to sustainable growth, for me this is the perfect definition of the importance of productivity. The productivity measures the output produced in an economy in relation to the inputs used. For example Spanish economic growth. The GDP has grown by around 4% per annum, which is as high as U.S. growth, but with a basic difference, becoming the Spanish economy to use more workers to produce the same or less outputs.

In United States, their employees work more hours or his technology is better and improve their production processes. For this reason, United States grow at rates much higher than that of the major European economies, with much more rigid industry and economy.

But of course the country number 1 is China, of course it is no surprise, from 2000 to 2007 labor productivity has risen by 10% per annum ¡¡¡¡¡¡¡¡¡, this means that each worker produces more than 10% final product that produced the previous year and well over 7 years cumulatively. The economic impact of this high productivity is tremendous.

India has improved nearly 5% annual labor productivity, which is very well.

Instead the United Arab Emirates, that is the famous Dubai has been slightly negative which is not any good sign for their economic future.

Of course the United States with high rates of productivity has declined in 90 of productivity growth rates below 2% per annum.

As I explain in several old post, productivity rates in Italy and Spain were between 0 and negative.