Labor productivity growth has been the key driving force behind the US economy’s success and prosperity since World War II. It has contributed 2.2% annually to economic growth and played a crucial role in the 1.7% annual gain in real incomes. However, the productivity growth rate has been declining in the past 15 years, averaging only 1.4%, despite incredible advances in digital technology. This decline is not unique to the US, as most OECD countries have experienced a drop in labor productivity growth since 2005.
To confront the challenges of workforce shortages, debt, inflation, and the cost of the energy transition, the US economy needs to regain historical rates of productivity growth. This would add $10 trillion to the GDP, a boost that is essential for the country’s economic stability and growth.
Currently, seven states lead the way in productivity growth:California, Colorado, Massachusetts, New York, North Dakota, Texas, and Washington. These states are not only more productive than the US average, but they are also increasing productivity faster. Together, they provide nearly one-third of the nation’s jobs and 40% of GDP.
https://www.mckinsey.com/mgi/our-research/rekindling-us-productivity-for-a-new-era#introduction
Learn how Loquat Inc. can help you with your transformation: www.loquatinc.io
