Issues, Strategies and Challenges
Services, Economy and Innovation series
Chapter 1: A Key Notion in Economic Analysis: Definitions, Measurements, Issues and Controversies
1. A key notion in economic analysis: deﬁnitions, measurements, issues and controversies INTRODUCTION Productivity is a notion that is apparently easy to deﬁne but diﬃcult to measure. The issues surrounding it are regarded as extremely important, not only for the models used by economists and managers but also, and above all, in the day-to-day management of ﬁrms and other organizations. Thus it lies at the heart of all economic theories. Corporate managers seldom make a statement without exhorting their workforces to be more productive and the distribution of productivity gains continues to be the focus of tough negotiations between trade union representatives and company managers. For all its centrality, however, its validity under certain circumstances has been called into question and it has given rise to a certain number of theoretical and methodological controversies. This general introductory chapter, which does not put services at the heart of the analysis, is divided into three sections. The ﬁrst section is given over to a general deﬁnition of the notion of productivity, in which we indicate the various levels of analysis that can be envisaged and note the confusions to be avoided. In the second section, we survey the main methods used to measure productivity, whether they be index-based methods or (parametric or non-parametric) frontier techniques. The third section is devoted to a theoretical consideration of the place of the concept of productivity in economic theory. By way of conclusion, we outline a number of current controversies that call...
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