Irish workers were ranked the most productive in the world by the Organisation for Economic Co-operation and Development (OECD). For every hour that an Irish person works, they add $99.50 (€88) to the GDP of the economy, according to the latest OECD findings.
Following Ireland is Norway, at $83.10 (€73.55) per hour, with Germany ranked third at $72.20 (€63.90) per hour.
Ireland’s rate is almost twice the OECD average of $54.80 (€48.50).
Ireland also ranks as more productive than some of the world’s largest economies, including the UK ($61.10, €54.08), the US ($72, €63.73) and France ($69.60, €61.60).
Irish economic growth
According to the OECD, labour productivity is a key driver of economic growth and living standards. GDP per hour worked is a measure of labour productivity and examines how efficiently labour input are combined with other factors of production and used in the production process.
According to the OECD, productivity remains below pre-crisis rates in many countries, while economies such as the UK, Canada and the US have been slowing down since the early 2000s.
Overall, productivity growth in manufacturing continues to outpace that of services.
Within the business services sectors, information and communication services are driving growth in Ireland.
The OECD found that, in most countries, there are productivity gaps between smaller and larger companies. Countries such as Ireland, with a high concentration of large multinational firms, benefit from increased productivity.
Investment in knowledge-based capital (KBC) is also important. People trained in, and working for, knowledge-based industries help to foster economic growth and productivity. With an influx in tech companies over the last decade, Ireland has seen huge growth in knowledge-based industries.
The OECD findings show that Ireland is bucking the trend of sluggish productivity growth that has affected most advanced countries since the mid-1990s.
Most western economies suffer from a ‘productivity paradox’, in which, despite rapid technological change, increased use of global value chains and rising education levels, they perform poorly from a productivity growth perspective.
Since the 1990s, Ireland has more than doubled its labour productivity, while countries such as the UK, Germany and France have failed to reverse declining levels.