Lessons from productivity research: Applying these to a strategy for Japan

Gears moving


This study presents selected lessons learned from productivity research. It examines the extent to which the key empirical questions about productivity have been answered. While the productivity growth residual (TFP) is still somewhat puzzling, soft innovations and new business models are seen as important contributors. Aggregate and industry growth data are reviewed and show how a few industries contribute a lot to overall growth; notable is the large contribution of high-tech manufacturing to U.S. TFP growth. Similar findings also hold for Japan. There is an extended summary of the lessons learned from cross-country comparisons of the levels of productivity in different industries using business economics information. High competitive intensity is positive for productivity, while regulations and trade restrictions are negative. The productivity lessons are applied to develop a strategy to improve productivity in Japan, stressing catch-up in protected industries, improving the education system, and the need to restore Japan’s strength in high-tech.

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  • Acknowledgements and disclosures

    Generous support for this research has been provided by the Japan Productivity Center. I would like to thank James Kunhardt and Rayan Sud for great research assistance. Helpful comments have been received from the Japan Productivity Center staff and Barry Bosworth.