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DOCUIRENT RESUVT
06768 - (B2347397]
Productivity as a Factor in Economic Prosperity and the
AppL'priate Federal Role. August 15, 1978. 22 pp.
Testimony before the House Committee on Small Business: Access
to Equity Capital and Business Opportunities Subcommittee; by
Harold L. Stuqart, Deputy Director, Financial and General
Management Studies Div.
Contact: Financial and General Management Studies Div.
Organization Concerned: National Center for Productivity and
Quality of working Life.
Congressional Relevance: House Committee on Small Business:
Access to Equity Capital and Business Opportunities
Subcommittee.
A recent GAO evaluation of tie National center for
Productivity and Quality of Working Life dealt with the
effectiveness of the Center and the Peder&l role in naticnal
productivity. Improved productivity is an important factor in
economic prosperity because it can mean an improved standard of
living for workers; it lessens inflationary pressures; and it is
important in maintaining the competitive position of the United
States in the international economy. The average annual rate of
increase of productivity in the private business economy from
1967 to 1977 was 1.6%, half that of the period between 1947 and
1967. This rate is the lowest average annual rate in
manufacturing productivity among six industrial nations during
the period 1967-1977. Factors affecting the decline in
productivity growth include: shifts in the industrial
compositioa of the economy; changes In labor fcrce coapcaition;
slowdown in the rate of improvement in the capital-labor ratio;
slowdown in research and development expenditures; diversion of
capital investment to meet environmental, health, and safety
requirements; stagnation of some industries; and changes in
worker attitudes. Future productivity rates are estimated at 2%
or lower, with the outlook contingent on correcting the causes
of the depressed rates. Improved productivfty in small business
depends Rostly on improvements obtained from outside sources.
The Federal Government can affect productivity indirectly by
establishing policies and laws which affect demand, supply, and
investments; setting standards .:4 regulating quality of output
and input; and defining the social and economic context in which
business enterprise must operate. It has a direct impact through
ongoing programs administered by individual agencies. (5TV)](ViewImageLocal?handle=hein.gao/gaobadyax0001&div=1&collection=&method=preview&ext=.png&size=3)