Why is productivity important for a nation?
Productivity growth is a crucial source of growth in living standards. Productivity growth means more value is added in production and this means more income is available to be distributed. It also provides the discretionary income necessary to finance social/environment programs. With higher productivity growth, it helps improve the outlook for all of these issues. It helps keep inflation in check and makes it easier for American businesses and workers to compete. It also raises the standards of living, and reduces the difficulty of meeting long –run demographic challenges by increasing the total amount of resources available. Productivity in a nation is a reflection of what both domestic and foreign firms choose to do in that location. According to Stevenson (2009) states “productivity levels are also important for industries and companies. For companies, a higher productivity relative to their competitors gives them a competitive advantage, in the market place. With a higher productivity, they can afford to undercut competitor’s prices to gain market share, or charge the same prices but realize greater profits. For an industry, higher relative productivity means it is less likely to be supplanted by foreign industry”.
Why do you suppose that service jobs have a lower productivity than manufacturing jobs? Service jobs have lower productivity than manufacturing jobs. Because services represent an increasing share of the economy, this places added importance to understanding and dealing with the challenges of managing services. Jobs in service environments are often less structured than in manufacturing environments. Customer contact is usually much higher in services. In many service, worker skill levels are low compared to those of manufacturing workers. Service performance can be adversely affected by workers emotions, distractions and some other factors that are beyond the manager’s...
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