productivity is an economic indicator? which measures the economic output divided by the amount of labour hours used to create it. Increases in productivity are linked with increases in the standard of living?, since output per person hour is the combined wage for the capital and labour used to produce the output. If productivity goes up, real wages can go up (and usually do).

Since the object of economic policy is usually to increase the standard of living, governments are keen to increase productivity,
  • encouraging investment? in better tools and methods of production.
  • funding education and training of workers.
  • promoting innovation?, including research and development? of new technologies.
  • devising economic development strategies which expand high skill/high wage employment.

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