The importance of developing skills in order to maintain productivity growth and employment lies, as developing productive lines is important in combating poverty and exclusion, in developing and developed countries alike, and developing skills on competitiveness and usability, through the promotion of education, training and continuous learning, it is a virtuous circle that includes increasing productivity Good employment, income, growth and development through political contribution contribute to the development of skills for short-term economic and long-term development.
Where productivity is based on a relationship between outputs and factors of production. It occurs when an increase in output occurs in conjunction with a less proportional rise in the factors of production, or when the product itself is produced with lower factors of production.
Productivity can also be approached from a critical perspective. If the price charged for an outcome increases, without an increase in the cost of factors of production, this is also an increase in productivity, due, for example, to the increase in world prices of agricultural commodities or minerals.
We can also measure productivity either on the basis of combined productive factors (total factor productivity) or on the basis of worker productivity, which is the output per unit of worker production, which is measured either by the number of working people, or by the number of hours worked.
To usefully examine the levels of productivity in different countries, we convert the GDP figures of US $ 1 per GDP into comparable data on the basis of purchasing power parity, which takes into account price differences in a unified set of goods and services in different countries.
We can also understand productivity improvements at different levels. The productivity of individuals can be reflected in employment rates, wage rates, employment stability, job satisfaction, or employability in various occupations or sectors. In addition to the output per worker, productivity in development facilities in the economy in general can be measured.
Productivity growth can increase income and reduce poverty in a virtuous circle. Productivity growth reduces production costs and increases investment returns, some of which translate into income for entrepreneurs and investors and others into higher wages.
Prices can fall, consumption and employment grow, and people escape poverty. It also contributes to the virtuous circle of the investment side of the economy when reinvesting from the productivity gains in renewing products and operations and improving factories and equipment and expansion measures in new markets, which leads to increased productivity and productivity growth.
In the long run, productivity is the main determinant of income growth. If the productivity gains of real income in the economy increase and this leads to its distribution through increasing wages. And development strategies based on
Low wages and skills are unsustainable long-term strategies that run counter to poverty reduction.
Investing in education and skills helps “steer” the economy toward higher value-added activities and dynamic growth sectors.
This leads to changing consumption and production patterns. Work is reorganized in response to new demands and technologies. However, reorganization does not happen automatically and is rarely easy. Workers and enterprises are affected differently. Some establishments may find a shortage of their skills while others face a surplus. Schumpeter excelled in understanding this contradiction, describing the process of renewal in market economies as a “constructive demolition”.
It is important that both workers and enterprises benefit from increased productivity. Increasing productivity may enable enterprises to make new investments and transfer innovation, diversification and expansion to the new markets necessary for future growth. Increased productivity may lead to higher incomes for workers, improved working conditions, increased benefits and reduced working hours; This, in turn, may increase workers’ satisfaction with their work and their enthusiasm.