Productivity, a measure of an economy’s ability to generate growth, has become of a matter of increasing concern among policy-makers around the world as headline growth rates remain weak and fears emerge of a new economic slow-down.
Publishing its annual index of competitiveness based on an aggregate of some 103 indicators, the WEF urged countries to use fiscal policy and other incentives to boost research and development, workforce skills and infrastructure.
“What is of greatest concern today is the reduced ability of governments and central banks to use monetary policy to stimulate economic growth,” WEF managing board member and report author Saadia Zahidi said.
“This makes it all the more important that competitiveness-enhancing policies are adopted that are able to boost productivity, encourage social mobility and reduce income inequality,” she added.
The WEF, which hosts the annual Davos meeting of business and political leaders, compiles its index by aggregating findings from its own surveys and other sources such as the World Bank and United Nations bodies.
Singapore came top this year with a rating of 84.8 out of a theoretical maximum of 100 after the United States saw its score slip to 83.7 from 85.6 last year.
Highlighting some of the trends captured by the report, the WEF noted in particular that technological innovation was racing ahead of workforce skills in many countries and urged governments to focus on labor and education policies.
Citing the threat of rising protectionism, the Paris-based Organization for Economic Cooperation and Development (OECD) said last month the global economy could be entering a new, lasting low-growth phase. It estimated global growth this year of 2.9%, the lowest since the 2008-09 crisis.
Reporting by Mark John, editing by Ed Osmond