How a country`s policies influence productivity growth

Every organization has its own policies. They serve as standard or guidance on how
things should be done, as policy by definition is a law, regulation, procedure, administrative
action, incentive, or voluntary practice of governments and other institutions. People are often
confused as why there is a need for policies for they deemed it as bureaucratic or overbearing but
in reality, an organization without concrete policies has no control over their action. Policies are
essential for decision making needed by every institution more so by the county`s government. It
gives assistance to several aspects in our society particularly with respect to productivity growth.

Productivity growth is considered as the key source of economic growth which is the goal
of every country. It measures the efficiency of the production through calculation of output per
unit of input. Productivity is affected by several factors such as labour, human capital and
technology which in turns is the focus of the country in developing policies to achieve
productivity growth. The government utilizes its power to create policies that will benefit the
working sector since labour has a great impact on productivity; increase in the satisfaction of
workers also increases their efficiency. Several laws are implemented that governs the labour
sector such as minimum wages, employment protection and employment benefits. The country is
also concerned with human capital which is the measure of the skills, education, capacity and
attributes of labour which influences the productive capacity and earning potential of its
constituents. Investing in human capital gave rise to creation of policies regarding health and
education which will be beneficial in overall growth of the country`s production. Policies in
relation to this are implementation of free and quality education for public schools and local
universities, and vaccination policies which in turn will significantly contribute to long term
economic growth. Another factor that must be given attention to is the technology, which is
rapidly improving and failure to cope up with it will negatively affect a country`s productivity
growth. Technology makes it possible to elevate the processes, discover new methods and create
machineries that will speed up the production in society. The government invests in technology
through funding of research and development projects that are valuable to either government or
society as a whole. In addition, other polices are implemented to assist entrepreneurs and
enterprises in conducting businesses such as government grants and loans, and tax incentives.
Furthermore, the government monitors the movement of market through price monitoring, and
all of these actions are performed to increase and sustain the productivity growth in a country.

Policies are created by a country to achieve its objective, the overall economic growth.
One of its essential aspects is the productivity growth which is affected by several factors such as
labour, human capital and technology but is not limited to the aforementioned. Investing in these
factors incurs short-term and long-term costs but eventually will generate returns through
increase in productivity.