The OECD Compendium of Productivity Indicators presents a broad overview of recent and longer term trends in productivity levels and growth across OECD countries and key partner economies. It highlights the key measurement issues faced when compiling cross-country comparable productivity indicators and describes the caveats needed in analyses. It examines the role of productivity as the main driver of economic growth and convergence, and the contributions of labour, capital and multifactor productivity to economic growth. It looks at the contribution of individual industries or sectors as well as the role of firm size and business dynamics. It explores the link between productivity, trade and international competitiveness, and analyses trends as compared with cyclical patterns in labour and multifactor productivity growth.

Productivity growth is a central driver of long-term economic growth and living standards. But in many advanced and emerging economies productivity growth has been slowing. Against a backdrop of slower rates of investment coupled with increases in income and wealth inequalities, concerns are emerging that this may reflect a structural, and not a cyclical, slowdown, and a new low productivity growth paradigm, with consequential impacts on well-being and inequalities. Promoting productivity growth and sharing productivity gains, through the exploitation and creation of new and emerging technologies, investment in human capital (to meet the needs of 21st century production), and by fostering innovation, in particular through young firms, is as important today as it has ever been, to create a virtuous circle that tackles both growth and inclusion gaps.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities or third parties. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Productivity growth has been slowing in advanced economies since the mid-1990s, and more recently also in emerging economies. This decline has occurred at a time of rapid technological change, increasing participation of firms and countries in global value chains, and rising education levels in the labour force, all of which are generally associated with higher productivity growth. These seemingly contradictory facts have raised interest in the ”productivity paradox” and whether the productivity slowdown is a transitional phenomenon or a longer-term condition. This chapter presents relevant evidence and discusses different views and explanations about the observed productivity trends. It also describes emerging challenges in measuring productivity and the way forward.