Gone with the Headwinds: Global Productivity

Abstract

DISCLAIMER: Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate. The views expressed in Staff Discussion Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Transformational Strategies and Productivity Growth: A Transformational‐Activities Perspective on Stagnation in the New‐Normal Business Landscape

“…These prescriptions – grounded in the management scholarship on organizational decline and transformational activities – stand in addition to the policy prescriptions offered up by economists engaged in the new‐normal discourse (e.g., Summers, , ; Tuelings and Baldwin, ). There, economists have offered up a number of recommendations – i.e., improving education systems; investing in physical infrastructure; removing barriers to labour mobility; stimulating aggregate demand; enhanced application of anti‐monopoly laws, and permanent incomes (Adler et al, ; Tuelings and Baldwin, ; Storm, ) – to reverse the flagging pace of innovation and technological change in order to escape the new‐normal business landscape by stimulating productivity improvements. Yet the unique insights and perspective of management scholarship has until this point been missing in the new‐normal discourse.…”

“…While our study departs from the norms manifest in the literature on organizational decline and transformational activities by taking a pan‐industry approach in order to best categorize the forest of transformational activities, future efforts that engage in industry‐specific analysis akin to Anand and Singh () may be called for in certain instances. For example, the information and communications technology (ICT) sector might merit specific analysis due to its growing importance (Bunyaratavej et al, ) and the fact that it is often credited with involving substantial positive spill‐overs to the productivities in other sectors that employ its products intensively (Adler et al, ; Syverson, ). In addition to ICT, future research could gather whether there exist industrial contexts where renewal and recombination do not represent the unique transformational strategies that alleviate sustained periods of negative‐productivity‐growth.…”

Measurement and Determinants of Multi‐factor Productivity: A Survey of Literature

“…Similarly, Adler et al . (2017) said, “As the key source of progress in living standards over the long term, persistently sluggish TFP growth is an obvious source of concern….” The long‐run MFP growth is influenced by economies of scale, whereas the short‐run productivity gains are heavily affected by the business cycles and capacity utilization. The difference in the market power of large and small establishments could lead to the occurrence of scale effects.…”

Fear the walking dead

“…3 Beyond measurement, there are a number of structural headwinds -such as the aging workforce, the slowing global trade and the fading ICT boom -that weigh on productivity growth (Adler et al, 2017). And some authors point to fundamental differences between current innovations and past breakthroughs, such as the steam engine or electricity.…”