Global Productivity Trends & What it Means For Future of Work and Growth

Explore the top global productivity trends for 2025 based on OECD data. Learn how labour shifts, tech investment, AI forecasting, and policy changes are reshaping productivity worldwide.

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Why Global Productivity Should Be on Everyone’s Radar

Global productivity isn’t just an economic metric it’s the engine behind wage growth, innovation, and geopolitical power shifts. According to the OECD Compendium of Productivity Indicators 2024, while advanced economies struggle with stagnant output (just 0.6% annual growth since 2020), emerging markets like India and Vietnam are surging ahead at 4.2%, rewriting the rules of competition. For entrepreneurs, this gap signals untapped markets; for governments, it’s a wake-up call to invest in AI and upskilling; and for workers, it dictates everything from job security to remote work flexibility. Here’s how these trends will redefine the 2025 workforce and why ignoring them could cost you.

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1. Labour Productivity Is Growing But Cautiously Amid Global Productivity Trends

• OECD countries saw 1.4% labour productivity growth in 2023, slightly below the 1.7% historical average.
• The U.S. rebounded from negative productivity in 2022 to +1.5%.
• Growth in Asia outpaced Europe, showing an eastward shift in economic momentum.

Why it matters: Labour productivity is still the single most important factor in GDP per capita. When it stalls, wages, innovation, and living standards do too.

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2. Multifactor Productivity (MFP) Reveals Structural Weaknesses

• In over 10 OECD countries, MFP declined, signaling operational inefficiencies and innovation slowdowns.
• The U.S. dropped sharply from +1.7% to -1.6% MFP in one year.
• Only countries like Spain and Ireland bucked the trend with strong gains.

What this suggests: Real productivity improvement isn’t just about working harder — it’s about working smarter. And in 2025, efficiency, not effort, will be the winning play.

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3. Investment Is Up — But Intellectual Property Is Losing Ground

• Traditional investment in infrastructure and housing is rising.
• However, investment in intellectual property products (IPP) is declining.
• This could signal underinvestment in the very technologies that power future productivity.

Implication: A productivity slowdown may hit economies that fail to invest in R&D and digital innovation.

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4. Shifts in Sector Employment Are Slowing Down Gains

• More people are now employed in low-productivity sectors (e.g., hospitality, food services).
• The temporary productivity gains from the COVID-era shift to digital services are fading.
• This is creating a drag effect on overall national productivity rates.

2025 outlook: Expect more discussion around automation and upskilling to offset this reallocation drag.

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5. Global Inequality in Productivity Is Still Alarming

• OECD productivity varies dramatically from $25/hour (Mexico) to over $100/hour (Ireland, Norway).
• The gap between high and low-productivity economies has not meaningfully narrowed.

For developing countries: Closing the productivity gap requires not just capital, but technology transfer, education reform, and institutional trust.

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6. Firm Size Still Determines Efficiency

• Large firms continue to outperform SMEs in productivity, particularly in manufacturing.
• Small businesses often lack access to capital and digital tools that would improve output.

The future fix: Targeted policies and digital infrastructure designed specifically for SMEs could unlock untapped national productivity potential.

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7. Machine Learning Is Now Forecasting National Productivity

• The OECD used machine learning (e.g., Gradient Boosted Trees) to accurately forecast productivity in 38 countries.
• These models showed exceptional accuracy in large economies like Germany, France, and Japan.

Trend for 2025: AI will not only shape productivity through automation it will also shape how we predict and respond to it in real-time.

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8. What It All Means for the Future

• Labour productivity will define economic resilience.
• Underinvestment in digital infrastructure could cost countries their edge.
• AI and machine learning will drive smarter policy and planning.
• SMEs need digital upskilling support to close the firm-level gap.
• Emerging economies must invest in IP, not just physical infrastructure.

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Conclusion: Productivity Is the Signal Everything Else Is Noise

In a world of economic noise, productivity is the cleanest signal for growth and sustainability. The 2024 OECD data reveals a world that’s recovering, yes but also at risk of divergence. Some countries will surge forward through digitalization and AI integration, while others may stall due to underinvestment in innovation and workforce skills.

As a designer, entrepreneur, or policy thinker, the question isn’t just “Where are we now?”
It’s: “Are we investing in the systems that will keep us productive five years from now?”

Glossary of Terms & Short Forms

OECD – Organisation for Economic Co-operation and Development

An international organisation of 38 countries that promotes policies to improve the economic and social well-being of people around the world. It publishes widely respected economic data, including productivity indicators.

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GDP – Gross Domestic Product

The total monetary value of all goods and services produced within a country during a specific time period. It’s a key measure of a country’s economic performance.

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Labour Productivity

Measures the amount of output (usually GDP) produced per hour worked or per worker. Higher labour productivity means more is being produced in less time.

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Multifactor Productivity (MFP)

Also known as total factor productivity, this measures the efficiency with which labour and capital inputs are used together in the production process. It reflects improvements due to innovation, technology, skills, or better management.

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IPP – Intellectual Property Products

Refers to intangible assets used in the production of goods and services, such as software, patents, R&D, and databases. Investment in IPP is a strong indicator of a knowledge-driven economy.

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PPP – Purchasing Power Parity

An economic metric that adjusts GDP or wages across countries by accounting for differences in the cost of living. It allows for better comparison of productivity and income across nations.

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SMEs – Small and Medium-sized Enterprises

Businesses that maintain revenues, assets, or number of employees below a certain threshold. SMEs are vital for job creation but often lag in productivity compared to large firms.

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Nowcasting

The use of real-time data and machine learning to estimate current economic indicators (like productivity or GDP) before official statistics are released. It’s increasingly used by central banks and policymakers.

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Gradient Boosted Trees (GBM)

A machine learning model used in forecasting. It builds strong predictive models by combining the outputs of many simpler models. The OECD used GBM to forecast productivity with high accuracy.

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Reallocation Effects

Refers to productivity gains or losses that result from workers moving between sectors e.g., from low-productivity sectors like hospitality to high-productivity sectors like tech. These effects were especially visible during the COVID-19 pandemic.

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Digitalisation

The integration of digital technologies into everyday activities and business processes. It’s a key driver of productivity growth, particularly in services and knowledge-based sectors.

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AI Forecasting

Using artificial intelligence (AI) to predict economic trends such as productivity growth, employment rates, or sector shifts. AI tools can quickly analyze large datasets and uncover patterns that inform economic planning.

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FAQs

References

Appfluence (n.d.) Productivity Insight Reports. Available at: https://appfluence.com/productivity-insight-reports/ (Accessed: 20 May 2025).

Bureau of Labor Statistics (BLS) (n.d.) Productivity Charts. Available at: https://www.bls.gov/charts/productivity/ (Accessed: 20 May 2025).

OECD (2024) Compendium of Productivity Indicators 2024. Paris: OECD Publishing. Available at: https://www.oecd.org/publications/compendium-of-productivity-indicators-22252126.htm (Accessed: 20 May 2025).

POLITesi (2022) Personal Productivity Visualization. Available at: https://www.politesi.polimi.it/handle/10589/192882 (Accessed: 20 May 2025).

World Bank (2023) Global Productivity: Trends, Drivers, and Policies. Washington, DC: World Bank. Available at: https://www.worldbank.org/en/research/productivity (Accessed: 20 May 2025).