productivity

In economics, the output produced by a given quantity of labour, usually measured as output per person employed in the firm, industry, sector, or economy concerned. Productivity is determined by the quality and quantity of the fixed capital used by labour, and the effort of the workers concerned.

The level of productivity is a major determinant of cost-efficiency: higher productivity tends to reduce average costs of production. Increases in productivity in a whole economy are a major determinant of economic growth. It is important to distinguish between the rate of growth of productivity and the level of productivity, since at lower levels of productivity, higher rates of productivity growth may be achieved.