Unconventional Wisdom

Only a handful of companies hold the key to boosting national productivity

National productivity growth is a matter of a few standout firms taking bold strategic action rather than millions of firms raising efficiency.
Productivity and prosperity

Single companies can move the productivity needle for entire economies—the “power of one.” Across major advanced economies from 2011 to 2019, a relatively small number of firms making bold strategic moves generated the majority of productivity growth in powerful bursts rather than in a smooth trickle of gradual change and with strategic moves, top-line growth, and portfolio shifts more than efficiency gains.

A series of stacked bar charts displays the contribution of firms to productivity growth in the United States, Germany, and the United Kingdom. The charts show that a small number of firms—the Standouts and Stragglers—accounted for a disproportionate share of productivity growth and degrowth. In the United States, 5 firms (Standouts) accounted for 78 percent of positive growth, while two firms (Stragglers) accounted for 57 percent of negative growth. In Germany, a very small number of Standouts contributed 65 percent of the positive growth and Stragglers contributed 66 percent of the negative growth. Finally, in the United Kingdom, the very few Standouts accounted for 45 percent of positive growth, while Stragglers accounted for 48 percent of negative growth. The exhibit highlights that a small percentage of firms had a significant impact on overall productivity growth. The chart also shows Standouts and Stragglers made a significantly larger contribution to employment than other firms in the sample

For more, see: The power of one: How standout firms grow national productivity.