Stagnant productivity is the not-so-secret shame of the world’s most advanced economies. While most countries have clawed back many of the losses suffered during the last recession, productivity has stubbornly refused to budge more than a fraction of a percent.
The productivity paradox has mystified some of the best business brains in the world; what makes it even more puzzling is that new technologies such as AI and automation, together with widespread digital transformation efforts by businesses, have so far failed to unlock greater productivity over the last few years.
This question becomes more complex still when we take a step back from the current period of stagnation, and examine the link between productivity and pay. Where once a growth in output per person would be reflected in higher wages, for three decades now income has stopped growing in line with rises (or falls) in productivity. This leaves us in the stra