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OECD Factbook 2014
Economic, Environmental and Social Statistics
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http://dx.doi.org/10.1787/factbook-2014-en
Productivity and growth accounting
Please cite this chapter as:
OECD (2014), “Productivity and growth accounting”, in OECD Factbook 2014: Economic, Environmental and Social Statistics, OECD Publishing.
http://dx.doi.org/10.1787/factbook-2014-15-en
This work is published on the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries.
This document and any map included herein are without prejudice to the status of or
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OECD FACTBOOK 2014 © OECD 2014
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PRODUCTION AND PRODUCTIVITY • PRODUCTIVITY
PRODUCTIVITY AND GROWTH ACCOUNTING
Economic growth can be increased either by raising the labour and capital inputs used in production, or by greater overall efficiency in how these inputs are used together, i.e.
higher multi-factor productivity (MFP). Growth accounting involves breaking down GDP growth into the contribution of labour inputs, capital inputs and multi-factor productivity (MFP) growth.
Definition
Multi-factor productivity (MFP) growth is the residual part of GDP growth that cannot be explained by growth in either labour or capital input. The contribution of labour (capital) to GDP growth is measured as the speed with which labour (capital) input grows, multiplied by the share of labour (capital) in total costs.
In the tables and graphs, the contribution of capital to GDP g r o w t h i s b r o k e n d o w n i n t o I n f o r m a t i o n a n d Communication Technologies (ICT) and non-ICT capital.
ICT capital covers hardware, communication and software.
Non-ICT capital covers transport equipment and non- residential construction; products of agriculture, metal products and machinery other than hardware and communication equipment; and other products of non- residential gross fixed capital formation.
Comparability
The appropriate measure for capital input in the growth accounting framework is the flow of productive services that can be drawn from the cumulative stock of past investments in capital assets. To ensure cross-country comparability of capital services and MFP data, the OECD Secretariat uses the same assumptions for all countries for
the overall production function, age-efficiency profiles, depreciation rates, service lives and harmonised ICT investment deflators.
MFP is typically perceived as the general efficiency with which inputs are used together to produce output. To a large extent, MFP captures disembodied technological change, resulting from scientific knowledge and its diffusion, management and organisational change, and spill-over effects. However, due to the assumptions used in the growth accounting model and data constraints in measuring the inputs, MFP also captures a number of other factors, such as variations in capacity utilisation and other cyclical effects, imperfect competition, changes in the skills composition of the workforce, returns from intangible assets not yet incorporated in capital services, and errors in the measurement of input and output.
Overview
While averages for the period 2000-11 mask volatility in growth drivers over time, GDP growth, over the period, was in large part driven by growth in capital and MFP in most OECD countries. ICT capital services contributed between 0.2 and 0.7 percentage points of GDP growth, with the largest contributions in the United Kingdom, Denmark and Australia, and the smallest in Finland, Germany and Italy. The contribution of non-ICT capital was the largest driver of GDP growth in Spain, Portugal, the Netherlands and Italy. Over the same period, the contribution of labour input was significant in Australia, New Zealand and Canada, while in Japan, Portugal, Korea, the United States, Ireland and Denmark labour input had a negative impact on GDP growth. From 2000 to 2011, MFP growth was a significant source of GDP growth in Korea, Ireland and Sweden, while Italy, Denmark, Portugal, Belgium and Spain recorded negative MFP growth.
Sources
• OECD (2013), OECD Productivity Statistics (Database).
Further information
Analytical publications• OECD (2004), Understanding Economic Growth: A Macro-level, Industry-level, and Firm-level Perspective, OECD Publishing.
• OECD (2003), The Sources of Economic Growth in OECD Countries, OECD Publishing.
Statistical publications
• OECD (2013), OECD Compendium of Productivity Indicators 2013, OECD Publishing.
Methodological publications
• OECD (2009), Measuring Capital, OECD Manual, Second edition, OECD Publishing.
• OECD (2001), Measuring Productivity – OECD Manual:
Measurement of Aggregate and Industry-level Productivity Growth, OECD Publishing.
• Schreyer, P. (2004), “Capital Stocks, Capital Services and Multi-factor Productivity Measures”, OECD Economic Studies, Vol. 2003/2.
Websites
• Productivity statistics, www.oecd.org/statistics/productivity.
PRODUCTION AND PRODUCTIVITY • PRODUCTIVITY
OECD FACTBOOK 2014 © OECD 2014
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PRODUCTIVITY AND GROWTH ACCOUNTING
Contributions to GDP growth
Average annual growth in percentage, 2000-11 (or closest comparable year)
1 2 http://dx.doi.org/10.1787/888933027437
Contributions to GDP growth
Average annual growth in percentage, 2000-11 (or closest comparable year)
1 2 http://dx.doi.org/10.1787/888933024872 Labour input
ICT capital
Non-ICT capital Multi-factor
productivity GDP growth
IT equipment Telecommunication
equipment Software Total
Australia 1.50 0.30 0.10 0.10 0.51 0.73 0.52 3.27
Austria 0.14 0.10 0.08 0.16 0.34 0.30 0.80 1.58
Belgium 0.82 0.26 0.04 0.12 0.43 0.35 -0.18 1.42
Canada 0.98 0.19 0.08 0.10 0.36 0.47 0.09 1.90
Chile .. .. .. .. .. .. .. ..
Czech Republic .. .. .. .. .. .. .. ..
Denmark -0.12 0.38 0.02 0.15 0.55 0.41 -0.22 0.63
Estonia .. .. .. .. .. .. .. ..
Finland 0.37 0.05 0.05 0.14 0.24 0.23 0.93 1.74
France 0.18 0.08 0.04 0.16 0.28 0.34 0.38 1.18
Germany 0.00 0.12 0.04 0.06 0.22 0.16 0.76 1.12
Greece .. .. .. .. .. .. .. ..
Hungary .. .. .. .. .. .. .. ..
Iceland .. .. .. .. .. .. .. ..
Ireland -0.14 0.16 0.05 0.09 0.30 0.83 1.48 2.47
Israel .. .. .. .. .. .. .. ..
Italy 0.18 0.10 0.06 0.06 0.21 0.39 -0.44 0.34
Japan -0.49 0.19 0.05 0.18 0.41 -0.06 0.76 0.61
Korea -0.32 0.08 0.10 0.15 0.33 0.87 3.13 4.02
Luxembourg .. .. .. .. .. .. .. ..
Mexico .. .. .. .. .. .. .. ..
Netherlands 0.23 0.21 0.02 0.15 0.38 0.46 0.21 1.28
New Zealand 1.21 0.19 0.17 0.13 0.48 0.41 0.08 2.19
Norway .. .. .. .. .. .. .. ..
Poland .. .. .. .. .. .. .. ..
Portugal -0.35 0.21 0.10 0.11 0.43 0.77 -0.19 0.67
Slovak Republic .. .. .. .. .. .. .. ..
Slovenia .. .. .. .. .. .. .. ..
Spain 0.71 0.11 0.13 0.14 0.38 0.84 -0.07 1.85
Sweden 0.45 0.17 0.01 0.25 0.44 0.32 1.03 2.23
Switzerland 0.72 0.12 0.10 0.17 0.39 0.18 0.42 1.70
Turkey .. .. .. .. .. .. .. ..
United Kingdom 0.20 0.31 0.10 0.24 0.65 0.37 0.52 1.72
United States -0.23 0.15 0.08 0.14 0.36 0.22 1.27 1.63
EU 28 .. .. .. .. .. .. .. ..
OECD .. .. .. .. .. .. .. ..
Brazil .. .. .. .. .. .. .. ..
China .. .. .. .. .. .. .. ..
India .. .. .. .. .. .. .. ..
Indonesia .. .. .. .. .. .. .. ..
Russian Federation .. .. .. .. .. .. .. ..
South Africa .. .. .. .. .. .. .. ..
-1 0 1 2 3 4 5
Labour input ICT capital Non-ICT capital Multi-factor productivity
