This primer aims to define productivity, how it is measured, what it means in the context of the economy and production of goods and services, how it can be best understood for firms and places and how it contributes to inclusive growth.
Productivity is a multi-faceted phenomenon. The simple measure of the average Gross Domestic Product (GDP) per working hour is widely used by economists, policy makers and the media feeding the policy debate on the productivity slowdown.
Productivity provides a powerful way to capture the vitality of an economy.
However, this macroeconomic measure does not reveal the details on how productivity matters for firms, people and local communities.
Only when we better understand the subtleties of productivity for different uses, can we have an informed national and wider debate on how the UK’s productivity performance can be improved to the benefit of all and become a key driver of inclusive growth.
