Measuring aggregate productivity accurately and consistently is an important objective for a National Statistical Institute (NSI). Users however, also want to look behind the statistics to understand the dynamics and determinants of productivity growth.
Increasing productivity is generally considered to be the only sustainable way of improving living standards in the long term. Statistical evidence to help policy makers understand the routes to productivity growth, especially those which can be influenced by government, can help lead to better policy.
This chapter introduces the main determinants, or 'drivers', of productivity growth. It then explains how productivity statistics can be compiled and presented in a way that helps illuminate some of the key determinants. In particular, this chapter gives details of the growth accounting framework that decomposes economic growth into the contributions of capital, labour and other inputs. It does this both for the economy as a whole and for sectors of industry.