Following the end of World War II, France and Germany made dramatic strides in narrowing the labor productivity gap with the U.S. Then that trend suddenly changed. This MGI report uncovers the reasons why and what France and Germany can do about it.
Telecommunications has been the success story for France and Germany. Looking to the future, France must make further operational improvements, Germany must identify ways to stimulate demand, and the U.S. mobile services market must consolidate.
To close the gap with the U.S. and to benefit more from industry innovation, German banks will need to consolidate. French banks need to improve their payment mix and would also benefit from an increase in volume.
Despite past successful strategies, French and German automotive industries still have significant room to catch up with Japan and the U.S. They will need to improve production efficiency and their understanding of consumer demand.
French and German road freight companies must turn to information technology if they are to survive, improving operations while shifting the focus away from increasing truck capacity.
Responsible deregulation in utilities will lead to productivity improvements. German utilities have already made strides here and have passed by the protected French sector.
Overview slideshow An overview shows some of the reasons for why France and Germany lag behind the U.S. in productivity. Launch slideshow
Productivity and GDP MGI connects the dots between recent productivity reports. Read more
Productivity and profitability Recent productivity performance in these two countries. Read more
Perspective—Improving European productivity MGI reviews key issues affecting Europe's economies. (2003) Read more
Confronting the costs of social policies It’s time to recognize that regulation has not preserved incomes, provided access to services, or prevented job losses. Read more on the McKinsey Quarterly site
U.S. productivity growth, 1995–2000 Technology is important for productivity growth but there is no simple, positive correlation between the two. Read more
Perspective—How IT enables productivity growth MGI investigates the impact of IT investments on three strong-performing sectors in the U.S.
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Perspective—Whatever happened to the new economy? Recent reports of the New Economy's demise have been exaggerated.
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