The Productivity Decline: Demographics, Robots, or Globalization?

In the early 21st century, there was a noticeable trend of declining productivity growth. Despite the persistent decline in productivity growth, a consensus on its explanation had not been reached. Some of the debate focused on the technicalities of productivity measurement, and the structural shift involved with the increased usage and introduction of robots in place of workers, garnering the interest of academic economists, businesses and policymakers. Another contention was whether declining productivity was the result of secular stagnation, a more permanent economic state of low growth and lack of economic progress, or whether it was the result of deleveraging and the post-Global Financial Crisis period, a mere cyclical phase. Distilling the sources and drivers of productivity decline was further complicated by the rise in economic integration across countries, and even more so considering research findings that research and innovation was becoming less productive and more difficult. What, if anything, was the role of government? Should businesses play a role? If so what should they do?