Productivity Puzzling: A Study on Recent Behaviour of UK and Bangladesh

Abstract

Productivity is a multi-faceted concept; no single definition can holistically describe it. However, in the simplest form, productivity signifies the ratio between the input and output. In achieving sustained economic growth of a country, increased productivity remains as the key component. Productivity signifies a continual striving towards the economically most efficient mode of production of goods, commodities, and services needed by a society. Prior to the mid-1980s, labour productivity growth was a useful barometer of the world economy: it was low when the economy was depressed and high when it was booming. In many larger advanced economies like UK labour productivity growth slowed sharply and remained subdued for years after the credit crisis of 2007/08. After the early 1980s productivity issues were considered as a priority area for action in Bangladesh: a small economic country, but Productivity has slowed down again significantly during the last decade (2001-2012) because of some reasons. In this paper, we tried to find out the reasons behind for productivity puzzling in UK as well as in Bangladesh. For  UK productivity puzzle, this study considered that workforce composition, lower business investment, flexibility of labour market, Impaired resource allocation, and public sector productivity were the major factors that might have caused productivity to fall and in Bangladesh, insignificant role of allocative efficiency of resources within industry, poor performing public sector, inadequate public sector investment, labor union, firm size and productivity are inversely related were the major factors that might had caused low productivity. In light of these findings, it is found that there is a similarity between productivity puzzling factor of UK and Bangladesh. Performance and investment in public sector and improper resource allocation are common productivity puzzling factor for both the countries.

Keywords: Productivity Puzzling, UK, Bangladesh