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This is an archived section of the Scottish Government website. External links, forms and search may not work on archived pages and content/contact details are likely to be out of date.

This page relates to the 2007 version of the National Performance Framework. Information about the current version of the NPF is available on the Scotland Performs Home Page.

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Current Status

Productivity

There was an improvement in Scotland's productivity performance relative to most of the top ranked OECD countries in 2009. Recent changes in productivity will reflect variations in the adjustment in GDP and employment across countries as a result of the global downturn. For example, Scotland's relative improvement compared to Germany (the lowest ranked country in the top quartile) in 2009 is due to: (1) a relatively larger decline in employment levels in Scotland; and (2) a higher rate of decline in GDP in Germany.

more on productivity

Productivity

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To rank in the top quartile for productivity against our key trading partners in the OECD by 2017

Productivity

Why is this Purpose target important?

The economy's sustainable rate of growth depends on several key factors: the numbers of people working, the average number of hours worked and the productivity of each hour worked. Productivity is a measure of how well an economy uses resources to produce output and is a fundamental determinant of international competitiveness and living standards. Labour productivity (as measured by GDP per hour worked) provides an effective, internationally recognised and comparable measure of competitiveness. Low labour productivity translates into low wages and poor living standards: profitable businesses will pay workers no more than they produce.

What will influence this Purpose target?

International evidence suggests that the following all have an impact on productivity performance:

  • Increased value, more effective and better targeted use of investment in physical capital.
  • Skills and qualification levels in the population.
  • The level of Research and Development (R&D) and innovation in business.
  • Entrepreneurship rates.

What is the Government's role?

The Government can take a number of actions to influence productivity, including:

  • Learning, skills and well-being: a supply of education and skills that is both responsive to, and aligned with, actions to boost demand for skills.
  • Supportive business environment: a broader approach to business innovation; stronger links between the research base and businesses; a responsive, focused enterprise support environment; and a focus on key sectors with the capacity to boost productivity.
  • Infrastructure development and place: establishment of a planning and development regime to give greater certainty and speedier delivery.
  • Effective government: streamlining of the Government's direct dealings with business, for example, in procurement.

How are we performing?

The evaluation is based on the change in the gap between productivity levels in Scotland and the lowest ranked country in the top quartile. Germany has been the lowest ranked country in the top quartile since 2002. In 2009 Scotland was ranked 17th (out of 32 countries) for productivity levels amongst OECD countries, placing Scotland at the top of the third quartile.

In 2008, Scottish Productivity levels were 82.5% of levels in Germany - a gap of 17.5 percentage points. In 2009, Productivity levels in Scotland were 86.3% of levels in Germany - a gap of 13.7 percentage points. Therefore between 2008 and 2009 the gap between productivity levels in Scotland and the lowest ranked country in the top quartile (Germany) decreased by 3.8 percentage points.

2009 GDP per hour worked (USA=100)

Source: Organisation for Economic Co-operation and Development, Office for National Statistics

Gap between Scottish Productivity levels

View data on Productivity

Source: Organisation for Economic Co-operation and Development, Office for National Statistics

Please note that this page has been updated since the original publication of the 2009 figures to reflect revisions to the data published by OECD and ONS in June 2011 and on 6 October 2011 respectively.

Methodology

This evaluation is based on: any difference in the gap within +/- 1 percentage points of last year's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 1 percentage point or more suggests that the position is improving; whereas an increase in the gap of 1 percentage point or more suggests the position is worsening.

For information on general methodological approach, please click here.

Further Information

Scotland Performs Technical Note

Statistics Topic Page

View Purpose Target data

Downloadable document:

Data for Purpose Target on ProductivityData for Purpose Target on Productivity [XLS, 261.5 kb: 25 Oct 2011]
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