American Economic Potential



Question 1

Raising productivity is important for unlocking the economic potential of a country

The efficiency of production when measured efficiently is known as productivity. It is the ration of the production output what is required by the inputs of production. There are various advantages of high productivity. Raising productivity means raising the living standards of people which increases the real income, raising the contribution to the social and environmental programs. Raising productivity means that the industries have more real income so that the firms can easily meet the obligations and remain competitive in the marketplace. Raising productivity ensures economic well-being. With the increased and efficient production, the country faces a well-being in its economy. The economic well-being is incurred within the three forms of production which are the public production, market production and household production. Economic well-being is mainly dependent on the market production (Barton, 2006).

The United States require increase in productivity for the growth and competitiveness in the industry. The US economy will not get the boost from the labor anymore because the baby boomers have retired now and there is formerly no female participation. The labor productivity growth must be increased to increase the living standards of the previous generation and increasing the GDP growth rate (Cohen, 2007).

The productivity in the US can be increased through the efficiency gains where the inputs are reduced for every given output and the volume along with value of output is increased for every given input. Those sectors which have large employment reductions have faced increased productivity. This has made American economy confused that productivity can only be increased when the jobs are destroyed. According to MGI, since 1929 only one year has recorded both the increase in productivity and employment. It is important for the American economy to turn towards the productivity growth of the 1990s where the demand was strong and the products had high value per unit which facilitated in jobs creation with increased productivity.

There is huge potential in the United States to raise the productivity and growth in the economy. Within the present business environment and regulatory the businesses can achieve the required raised productivity and growth acceleration. With the adoption of best practices, the companies can also achieve the acceleration in productivity. There is huge potential in the strong productivity of the US retail sector. It is required by the aerospace companies that they adopt lean practices in a systematic manner so that they can become the global exporters. Large opportunity is required in the healthcare sector of American economy. The required productivity growth can be implemented through the innovations in businesses and technology. The economic potential lies within the innovation of goods and services provision to the customers, improvised supply-chain integration, enhanced responses from the customer's behavior and preferences. The following are the imperatives from the government and businesses (Alvarez, 2006).

First is the productivity gains driven within the regulated sectors and public. US economy comprises of the healthcare and education within ...