In ordinary usage the word “productivity” is virtually synonymous with “working hard.” The person who says, “I was really productive today” means that she worked hard and checked off a lot of tasks.
It’s interesting, then, that this is not how economists who study productivity think about the term. In some ways, the economic concept of productivity is the opposite of how we typically think of productivity! The people who work the hardest are often those whose productivity stats are abysmal.
Productivity, as economists define it, is a measure of outputs divided by inputs. Labor productivity is the economic value of goods and services produced, divided by the number of hours a worker needs to invest to achieve it.
Consider a worker in Burundi. The gross domestic product per capita in Burundi is only $240 USD.1. In economic terms, the labor productivity of Burundi is abysmal—but it’s certainly not because the workers there are lazy. Instead, they lack the physical and human capital that would let them perform more productive work.
While a particularly industrious person might perform two or three times as many tasks as a slacker, actual productivity differences among people worldwide differ by many orders of magnitude. In other words, the best way to improve your productivity is not to work harder, but to change where you work!
Relocating to Higher Productivity
Because the environment you work in determines so much of your productivity, it can be by far the most important factor in the effective productivity of your work.
Huge inequalities exist in the environment surrounding productivity:
- Between countries. The United States is, on average, about 33% more productive than my home of Canada.
- Between industries. Japanese manufacturing is legendarily productive. Thus it might be surprising that Japan, as a whole, scores lower on productivity than the United States. The reason is that while car companies are incredibly efficient, the retail and agricultural sectors are not.
- Between firms. Top firms tend to be much more productive than middling competitors.
Choosing where to live and work is a big decision, so it makes sense that this element is often excluded in guides on how to “be more productive.” I don’t want to emigrate to the United States, even though I might benefit from networks that could accelerate my career. Limits to legal immigration, highly selective recruiting processes at top firms and the effort needed to switch professions may make moving to higher productivity impossible for some people. Nor is productivity all-important—wanting to live near family members or work in a profession you find interesting are important values, too.
However, the discrepancies in productivity are so large that these factors should not be overlooked. If you want to be more productive, the data are clear—where you work matters much more than how hard you work.
