Editor’s Overview

THIS MARKS THE 20th issue of the International Productivity Monitor (IPM). The Centre for the Study of Living Standards would like to thank Industry Canada for the financial support that has made the publication of the IPM possible over the past decade. This issue contains five articles on: the impact of the economic crisis on potential output and productivity growth in Canada; the sensitivity of estimates of Canada-U.S. capital intensity and multifactor productivity gaps to depreciation assumptions; a sectoral and provincial decomposition of Canada’s post-2000 labour productivity slowdown; the role of creative destruction in Finnish productivity performance; and the influence of public policy on manufacturing productivity growth in India.productivity, potential output, growth, capital intensity, multifactor productivity, depreciation, labour productivity, creative destruction, public policy

The UNIDO World Productivity Database: An Overview

This article introduces a new unique database, the World Productivity Database (WPD), which contains information on levels and growth of aggregate total factor productivity (TFP) for up to 112 countries, covering the period 1960 to 2000. At its core are numerous measurement methods, variations in functional forms and specifications — including schooling and health — of the production function, constant and variable returns to scale, as well as measures of technical progress and change in technical efficiency. In addition, five labour and four capital stock measures are used to derive a variety of TFP measures. Another significant feature is TFP forecasts for the period of 2001-2010.Productivity, total factor productivity, labour input, capital input, cross-country comparison

Editor’s Overview

THIS 18TH ISSUE OF THE International Productivity Monitor published by the Centre for the Study of Living Standards contains seven articles. Topics covered are the relationship between education, productivity and economic growth, new estimates of multifactor productivity for the Canadian provinces, the World Productivity Database developed by the United National Industrial Development Organization (UNIDO), and a symposium on the recently released Council of Canadian Academies Expert Panel report on business innovation in Canada.Productivity, Education, Growth, Multifactor productivity, Innovation,

Innovation and Business Strategy: Why Canada Falls Short

This article compares the development of labour productivity in the Swedish and the Finnish business sectors and the role of the information and communication technology (ICT) sector in this process. The results show that the Finnish productivity level has been converging towards the Swedish level, but that there is still a significant difference. This trend has coincided with the growing importance of the ICT sector, especially since the mid 1990s. Due to higher productivity and employment growth, the Finnish ICT sector has contributed to this convergence. This is explained by the electrical engineering industry. The Nokia effect has been stronger than the Ericsson effect.Innovation, productivity, business strategy, public policy, market structure, Competition, business climate, business ambition

Indian Manufacturing Productivity: What Caused the Growth Stagnation before the 1990s?

This article addresses the question of why productivity growth in Indian manufacturing was slow in the pre-reform period and analyzes how economic reforms in the 1990s accelerated productivity growth. The answer lies in two subtle but important distortion-inefficiency mechanisms, which affected productivity growth by distorting intermediate input allocation. The interaction of quantitative restriction policies and inflexible labour laws resulted in lower than optimal materials per worker usage. The combination of high inflation and unavailability of credit exacerbated this factor distortion and lowered productivity growth further. Using a panel dataset on Indian industries, this article finds widespread underutilization of materials compared to labour until recently, and this sub-optimal materials per worker usage lowered productivity growth.productivity, growth, materials, labour, quotas, labour laws, public policy, India

ICT Production and Productivity in Sweden and Finland, 1975-2004

This article compares the development of labour productivity in the Swedish and the Finnish business sectors and the role of the information and communication technology (ICT) sector in this process. The results show that the Finnish productivity level has been converging towards the Swedish level, but that there is still a significant difference. This trend has coincided with the growing importance of the ICT sector, especially since the mid 1990s. Due to higher productivity and employment growth, the Finnish ICT sector has contributed to this convergence. This is explained by the electrical engineering industry. The Nokia effect has been stronger than the Ericsson effect.Productivity, Convergence, Finland, Sweden, ICT production

Some Reflections on the Expert Panel Report on Business Innovation in Canada

This article reviews the Council of Canadian Academies Expert Panel report on business innovation. It finds the report comprehensive in its gathering and assessment of available research, innovative, in its own right, in its analysis of innovation as an outcome of business strategy formation, and impressively well ordered and written. Both lay readers and professional students of innovation and labour productivity will find the report to be of great value.Review, innovation, productivity

Elements of IPM for Dairy Cattle in New York State

NYS IPM Type: Livestock IPM ElementsThis is a checklist of items to help you develop or analyze whether you use IPM for flies in your dairy operation. If the IPM practice listed below is used across the farm then check it off and give yourself the all the points. If not, no points should be awarded. To be considered an IPM farm you must have 80% of the points accumulated

The Myths and Reality of Deindustrialization in Sweden: The Role of Productivity

This article analyzes three possible hypotheses behind deindustrialization in Sweden. The main conclusion is that deindustrialization is both a myth and a reality. There has been a decrease in manufacturing employment in both relative and absolute terms in the post-war period, and the share of nominal GDP has gone in the same direction. However, the high productivity growth in manufacturing has lead to an increase in its share of real GDP since the beginning of the 1990's. Using input-output analysis, it is shown that the loss of employed who work with satisfying final demand for manufactured goods is less pronounced than what is shown by official statistics. The explanation for this is a deeper interaction with the rest of the economy, particularly in relation to knowledge-intensive service industries.

The Impact of Labour Market Policies on Productivity in OECD Countries

We investigate the impact of labour market policies on labour and multifactor productivity with industry-level data. First and foremost, labour market policies can influence average measured productivity through their impact on employment. Other things equal, employment growth tends to be associated with lower average measured labour productivity growth as more low-skilled workers enter the workforce. However, policies can also have sizeable direct effects on individual productivity levels and/or growth by creating incentives for workers to invest in training, facilitating reallocation of resources to their most productive uses and generating or maintaining high-quality job matches. We find that employment protection legislation, minimum wages, parental leave and unemployment benefits influence productivity through multiple channels, over and above their impact on employment levels.Regulation, Labour Market, Productivity, OECD