Discuss the importance of productivity in an economy. Explain how education, research and development, and technology affect productivity.
In order to answer a question of this nature, the first thing that you need to do is define productivity; after which you may state some of the reasons why productivity is important in any economy.
Productivity may be defined in two ways:
1) It is the ability of an organization or company to convert available resources into profitable services or goods. In other words, it is about how well an organization is able to convert inputs (available resources) into outputs (goods and services).
2) It is a measure of the amount of ouput produced by a given amount of inputs in a specific period of time. Productivity normally goes up whenever more output can be produced with the same amount of inputs in the same amount of time. For example, if a company produced 500 units of a product in one period, and if it produced 510 in the next period with the same number of inputs - then productivity would rise or increase.
Source: Clayton, G. 2001. Economics: Principles and Practices. ...
This solution first provides a definition of productivity; after which a detailed explanation is given as to why productivity is important to any economy. To conclude, a look is taken at how education, research and development, and technology affect productivity. This solution is adequately referenced.