Productivity

This paper examines the important factors of productivity and makes a detailed comparison between Turkey and OECD countries. Productivity is a key factor in any country’s economic success. There is a very direct and a close relationship between productivity and a country’s economic growth, increase of living standards and purchasing power of its citizens. From the beginning of the 19th century till just before the start of the World War II, primarily the United States and some of the European countries had experienced stagnant economies, but this unfavorable situation immediately changed during the postwar period. We can come up with various reasons for this unprecedented growth however listing a few of the important ones will be satisfactory: 1) Increase in international trade; 2) shift of the workforce from low productivity agriculture to high growth industries; 3) the accumulation of wealth and innovation of new technologies during the depression years entering the economy during the postwar period; and lastly 4) people feeling optimistic about the future created favorable competitive environment which enabled them to act freely in their investment activities. The factors effecting productivity can be countless and in great variety. A Canadian agency named CSLS (Centre for the Study of Living Standards) identified and discussed seven main factors effecting productivity in its report titled ‘Productivity: Key to Economic Success.’ These are: 1) Natural resources base; 2) industrial structure and intersectoral shifts; 3) capital accumulation; 4) rate of technical progress; 5) quality of human resources; 6) macroeconomic environment and lastly; 7) the microeconomic policy environment (CLSL, 1998).