Low productivity puts Western economies at a crossroads

Graph showing fall in productivity growth in the G7 economies
The fading dynamism of many Western economies is explained by productivity growth, which has declined steadily since the early 1970s (source: macpixxel for GIS)
  • Low productivity growth has held back Western economies in the past decade
  • Poor educational systems, weak motivation and over-regulation have all been at fault
  • Inaction could cede a competitive advantage to the rest of the world, especially Asia

Economic growth is a relatively recent historical phenomenon. It began approximately in the 1820s in Great Britain and a few other Western countries, and for the next two centuries was an unmitigated worldwide success. During this period, world gross domestic product per capita increased by a factor of 13. Living standards rose to previously unimagined levels as purchasing power increased, working hours dropped, and working conditions improved all over the world. Despite rising income inequality, worldwide poverty has declined: the percentage of the world population living in extreme poverty dropped from 84 percent to less than 10 percent over this period.

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