Poland's productivity growth second only to China

According to the Conference Board, quoted in the FT, May 1, Poland's productivity growth accelerated by 7.7 per cent last year, second only to China.

Productivity - output produced per unit input (for example the quantity of a good produced in a given time period) - is a key indicator in assessing economic growth potential. Essentially, the faster goods and services can be produced with the same resources, the quicker a country accumulates wealth. And wealth usually finds its way into the property market.

However, although Poland's productivity growth rate accelerated the most, its workforce is not the most productive. According to the FT it is still half the European average. Thus Poland has a long way to go.

Interestingly, Poland's productivity growth is occurring despite 20 per cent of the workforce being employed in agriculture, which produces only 3 per cent of GDP. The productivity growth is apparently coming to a significant extent from foreign firms operating out of Poland, as they bring better production technology.

The hope is, and history has often shown, that countries which host foreign firms bringing new technology will absorb some of the technology themselves. Thus through 'technology diffusion' Poland may become even more productive.

Source:

Today