Canada's Productivity Performance in International Perspective

Dirk Pilat
2005 International Productivity Monitor  
THE PROMOTION OF GROWTH and productivity are on the policy agenda in most OECD countries, as governments seek to address problems related to sluggish growth, such as weak employment growth, high unemployment or fiscal deficits. This agenda has also affected the work of the OECD. A comprehensive study of growth performance in the OECD area, including a set of policy recommendations, was presented to the OECD Ministerial meeting in May 2001 (OECD, 2001). Further empirical findings and policy
more » ... mendations, focusing on the role of firm dynamics, regulatory factors and information and communications technology (ICT), were released in 2003 and 2004 (OECD, 2003a, 2003b, and 2004a). This article returns to the findings of these OECD studies and presents further empirical evidence on economic growth and productivity at the aggregate, industry and firm level. It particularly focuses on the different growth experiences of the main OECD regions, notably Europe, the United States and Japan, and pays special attention to the position of Canada. The next section discusses aggregate growth patterns in the OECD area, examining the main factors affecting growth as well as some of the policies that may help strengthen growth. The third section focuses on multifactor productivity (MFP) growth, or the overall efficiency of labour and capital, and some of the factors that may have influenced the pick-up in MFP growth in certain OECD countries, such as investment in R&D and more rapid innovation, as well as the impacts of ICT use and firm turnover. The final section draws some conclusions. Growth Patterns in the OECD Area Growth diverged in the OECD area The interest of many OECD countries in economic growth over the past years has been partly linked to the strong performance of the United States over the second half of the 1990s and the reversal of the catch-up pattern that had characterized the OECD area over the 1950s and the 1960s. During much of the early post-war period, most OECD countries grew rapidly as they recovered from the war and applied U.S. technology and knowledge to upgrade their economies. For most OECD countries, this catch-up period came to a halt in the 1970s; average growth rates of GDP per capita over the
doaj:d0788d2156c04e96a0bf6ea1e6cd7a3b fatcat:a7t5vtoshjg3pamuage575snzu