Overview of Productivity

Introduction

On this Platform, the main theme will be on Productivity, Research and Economics. So in this introductory Blog, we seek to explain the basic terms often used in the line of productivity. It is important to note that productivity concepts apply both the goods and services industries whether private or public in nature.

Basic Productivity Concepts

Productivity is a ratio of a volume measure of output to a volume measure of input use. Basically, it shows the relation between the amount of output produced and the amount of input used to produce that output.

Productivity can be measured in different ways. In broad terms, productivity measurement can be classified as Single Factor Productivity and Multi-Factor or Total-Factor Productivity. Single factor measure relates a measure of output to a single measure of input while multifactor productivity relates a measure of output to a bundle of inputs.  Productivity is usually measured in relation to the main inputs into the production process which are Labour and Capital.

Labour productivity shows how labour is used productively to generate output or value added and how rapidly technical change proceed.  It measures the amount of goods and/or services produced by one unit of labour.

Capital productivity shows how capital is being used productively to generate value added or output. It basically refers to the ratio of the output to physical capital.

 Multi-factor productivity shows how combined inputs, such as labour and capital, are used productively to generate output.

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