Growth in labour productivity is important because it is associated with economic growth, standards of living, and real incomes. It is another useful tool that we can use to compare the welfare and growth of countries. Labour productivity measures the amount of Real GDP produced by an hour of labour. Increases in labour productivity can occur from increases in the amount of machines and equipment available to workers, a higher proportion of skilled workers, increases in plant scale, changes in organizational structure, and improvements in technology (1). If labour productivity in a country is lower, it can mean that goods and services are not being produced efficiently. Countries that are able to adapt to new technologies and the way the global economy functions are more likely to have high productivity and a greater standard of living. Canada's labour productivity growth has lagged behind the US numbers for over 30 years and could be from a number of possible explanations. One reason in particular could be the sluggish innovation in the information technology industry. The tertiary sector of the global economy has been increasing in the last 30 years. However, Canada has been emphasizing focus on the primary industries such as mining and agriculture and the secondary industries like …show more content…
One way of investing in the IT sector is by promoting and incentivizing students to pursue a degree in an information technology field. A university degree is accepted as great indicator of advanced skills and talents. With more people flocking to the IT sector which includes science, math, computer science, and engineering, Canada can expect to have a generation of technological advances. Currently, Canada is producing a low percentage of graduates in these types of degrees and ranks 12th out of 16 countries according to the Conference Board of Canada
The global economy has been recovering from the financial crisis which occurs in 2008, then has a weak growth for most developed countries over 2012 and 2013. But economic activity in Canada has expanded at a faster pace than most other major advanced countries in 2012; however, economic performance in Canada has been unsteady throughout 2013 (The Economic review, 2013). After the last quarter in 2010 GDP growth rate grows rapidly, the GDP grows slowly but steadily in 2012 which remains at around 3 percent. Real GDP growth rate in Canada grows slowly in the first quarter of 2013, but increased by 5 percent in the second quarter ,then remains the same level until the first quarter of 2014 (Statistics Canada, 2014). In 2014, the Canadian government take a series economic action plan as a guide for the economy development such as improving investment conditions, ...
Great Britain lead the way for industrialization and made it spread through out Europe. Some consider this the best thing to have happened in the world. Others however see this as a bad thing. Of course, with such a big change came an effect over all people such as reformers and the government but the greatest effect was upon the workers. Since the 19th century, industrialization has had positive and negative effects on the lives of workers.
The Canadian economy and the United States economy tend to move together because of the amount of transactions that take place within the two nations due to their geographical proximity. With the United States recently experiencing a downturn in the economy, analysts estimate that the Canadian economy will not be far behind. However, in the past 10 years the Canadian economy and especially the trade balance have been very healthy.
People outside of Canada are baffled at how Canada ended up in such a state of affairs. Canada as a country has a lot going for it. A high GNP, and high per capita income in international terms. It is ranked at the top of the...
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
In many nations, the relationship between labor and production has often been a tense one. On one side of the equation, businesses have insisted on greater productivity at lower costs. On the other side, labor (most often in the form of labor unions) has insisted that increased productivity can be best be achieved if the workers have a reasonable “living” wage and job security (Howard 2002).
Between 1980 and 2011, labour productivity in Canada grew by 1.4% annually, compared to 2.2% in the United States (U.S.). In simple economic terms, labour productivity refers to output in dollars (or GDP) per hour worked; it is vastly important for one main reason-labour productivity is a key determinant of economic growth and well-being. This succinct essay will explore why Canada's labour productivity growth rate is lower than that of the U.S., the underlying context for the reason identified, as well as some possible policy measures that governments could introduce to reverse the current trend. Labour productivity is determined by three inter-connected factors: capital deepening (i.e., improvements in infrastructure and technology), labour composition growth (i.e., improvements in the skills and knowledge of the workforce), and multi-factor productivity (MFP), commonly referred to as innovation. The Conference Board of Canada defines innovation as, "a process by which economic and social value is extracted from knowledge by generating, developing, and implementing ideas to produce new or improved strategies, capabilities, products, services, or processes."
In the long run, an economy of a nation that seeks to gain wealth by focusing on expanding its industrial sectors through specialization and the division of labour is not only natural, but it is also beneficial for self-interests of all by creating more dexterous workers, increasing labour efficiency, and spurring innovation.
A 2009 OECD report shows that the majority of the time, earnings increase with each level of education. OECD also indicates that “there is a strong and direct relationship between investments in education, educational attainment, and economic growth.” When it comes to delivering high-quality education to its youth, Canada is strong. The Conference Board of Canada states that “Canada's strength is in delivering a high-quality education with comparatively modest spending to people between the ages of 5 and 19.” Canada is doing a good job of educating its people and rewarding their knowledge with well-paying
Determinants of Productivity Determinants of Productivity Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity; they are also called factors of production. There are four major determinants of productivity in any country’s economy. Land: the land itself, and raw materials such as oil and minerals beneath it. The natural resources that are available without alteration or effort on the part of humans.
One of the most important factors in improving productivity is innovation. The rate at which innovations diffuse through an economy is equally important. Technological innovations have had a tremendous impact on the exchange of informationand services in both the private and public sectors (Carter, Schaupp, & McBride, 2011).
The shortage of skilled workers in the coming decade poses a serious threat to all aspects of the Canadian economy. Like all others, our economy is comprised of three major elements: primary products, secondary goods and services. My research indicates that primary products constitute just over 7% of Canada's GDP, secondary goods account for 21%, and the services comprise 72%. This distribution although heavily in favor of the service industry still shows the importance of the secondary/manufacturing industry in Canada's modern day economy. Taking into fact that since the late nineteenth century, Canada's centre of manufacturing is focused in two provinces, Ontario and Quebec. Consistently, year after year, Ontario contributes about 50% of the Canadian total of manufactured goods produced, measured by value, and Quebec 25%.
Historically though, the impact of technology has been to increase productivity in specific areas and in the long-term, “release” workers thereby, creating opportunities for work expansion in other areas (Mokyr 1990, p.34). The early 19th Century was marked by a rapid increase in employment on this basis: machinery transformed many workers from craftsmen to machine minders and although numbers fell relative to output – work was replaced by employment in factories (Stewart 1996, p.13).
Theoretical model of modern economic growth shows that long-term economic growth and raise the level of per capita income depends on technological progress. This is because of without technological progress and with the increase of capital per capita, marginal returns of capital would diminish and output per capita growth would eventually stagnate (Solow, 1956; Swan, 1956). Studies have shown that “experience, skills and knowledge in the long-term economic growth is playing an increasingly important role” (World Bank, 1999). Despite how technological progress work on economic growth, and how there are different views on the role of in the end, but I am afraid no one would deny that technical progress in the important role of economic development. In this sense, for a country to achieve long-term economic growth, we must continue to promote technological progress. However, economic growth theory is analyzed in general, and usually under the assumption that in the closed economy, and technological progress in a country not normally have taken place in various departments at the same time, and now the economy are often increasingly open economy. In this way, the technological progress in different economic impact on a country may be quite different. In addition, we assume that technological progress is Hicks neutral, is to an industry in itself, but technological progress also reflects the establishment of new industries and development. The new industries and technology-intensive industries generally older than the high, the use of less labor. Even the old industries, the general trend of technological progress is labor-saving.
While there is no disagreement on this general notion, a look at the productivity literature and its various applications reveals very quickly that there is neither a unique purpose for, nor a single measure of, productivity. But many different productivity measures are available but choice to apply which depends on the purpose of productivity measurement and in many times on the available of data. Productivity measure in general can be categorised as either single factor productivity or multifactor productivity measure depends on the measure of output to input (OECD 2001). An economy only increases if the people “works smarter” and acquire more output from a given supply of