Global productivity must improve to avoid staggering slowdown
A report from the McKinsey Global Institute says without big gains in output per worker, global growth will slow dramatically
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WASHINGTON—The world economy, hobbled by aging populations, will slow dramatically over the next 50 years unless countries find ways to increase productivity.
That’s according to a report from the McKinsey Global Institute. It says that without big gains in output per worker, global growth will slow to around 2 per cent a year over the next half century from an average 3.6 per cent the past 50 years.
That would be slower than worldwide growth after the Great Recession or during the energy-crisis decade of 1974 to 1984. Several countries, including Germany, Japan and Russia, are already coping with shrinking labour forces as workers retire.
McKinsey sees opportunities to raise productivity by improving efficiency in health care and auto manufacturing and by reducing waste in food processing, among other things.