In this edition of Charts of the Week, a focus on some research about drivers of labor and industrial productivity.
PRODUCTIVITY IN INDUSTRIES INCREASES WITH TECHNOLOGICAL INNOVATION
Mark Muro’s research shows that sectors characterized as “non-advanced” have struggled to maintain high-performance productivity outputs. He notes that “advanced industries have steadily increased their productivity by developing and applying technological, organizational, and human capital gains (often through ‘digitization’).”
LARGE METRO AREAS HAVE A PRODUCTIVITY ADVANTAGE
Discussing the impact of location on U.S. productivity trends, Joseph Parilla and Mark Muro write that “Overall, the nation’s largest cities and regions tend to be the nation’s most productive areas.” The authors explain that regions tend to differ based on natural resources, industrial structures, the quality of local workforces, infrastructure, and technological capabilities, where productive industries tend to amass in resource hotspots like urban centers.
INVESTMENT IN DIGITAL SKILLS LEADS TO INCREASED PRODUCTIVITY
Examining why productivity levels were higher in the previous decade, Scott Andes and Jessica A. Lee noted that “Between the mid-1990s and 2000s, increasing use of IT helped make labor productivity grow quickly.” After this period of time, the authors explain that a lack in investment in workers’ acquisition of more advanced digital skills led to “labor’s share of productivity growth to decline by 5 percent over the last decade.”
Mimi Cottingham contributed to this post.