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What is productivity?

Productivity measures the rate at which inputs used in the production process translate into useful outputs. Two important inputs used in the production process are labour (human resources) and capital (physical resources). Output is usually measured in terms of Gross Domestic Product (GDP), i.e. the total market value of all goods and services produced within the economy over a given period of time. Labour productivity measures GDP per hour worked, and capital productivity measures GDP per unit of capital.

Why is productivity important?

Productivity growth is an important catalyst for higher living standards in an economy, which leads to higher real income for individuals. This can be achieved in several stages: Initially, if the labour and capital productivity increases, more output can be produced using the same amount of labour and capital. Increase in labour and capital productivity often complement each other. For instance, if more physical capital – such as machinery, equipment and buildings – is available to workers, the better they are able to do their jobs, producing more and better quality output. Likewise, an increase in skills of the workers would enable them to take advantage of new technologies and innovations in order to produce a greater volume of output.

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About the Partnership

The Productivity Partnership aims to engage researchers interested in studying Canada’s productivity challenge. The project is funded by a SSHRC Partnership Development Grant and awarded to a team of Canadian researchers.

The project’s goal is to increase the flow of existing knowledge (including data), and add to existing research capacity by bringing together thinkers from academia, public and private sectors, and funding their scholarly research.

The Partnership has funding available to support researchers in working with firm-level data, as well as attending related conferences in Canada or abroad. Moreover graduate students have the chance to work not just with their supervisor, but potentially network members, Innovation, Science and Economic Development Canada, or researchers at Statistics Canada.