There is little hope if total factor productivity barely grows

The fact that labour productivity by itself is weak may be misleading: there may be a substitution of labour for capital and, accordingly, rapid growth in capital productivity, with an economy that uses little capital. Conversely, if labour productivity grows rapidly, there may be an increase in capital intensity and a decline in capital productivity. The only proper measure of technological progress is therefore total factor productivity, the combined productivity of capital and labour. If total factor productivity hardly increases, potential growth will inevitably be weak. When analysing OECD countries, we see that the only countries that have avoided a small increase in total factor productivity since 2010 are the United States, Canada, Sweden, Denmark, Germany, the Netherlands, Portugal, Switzerland and Japan. We also see the strong correlation between total factor productivity growth and labour force skills .