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Productivity, Machinery and Skills in the United States and Western Europe

Published online by Cambridge University Press:  26 March 2020

Geoff Mason  and
David Finegold
Geoff Mason
Affiliation:
National Institute of Economic and Social Research, London
David Finegold
Affiliation:
University of Southern California, Los Angeles
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Abstract

In two very different industries—biscuit manufacturing and precision engineering—US leadership in labour productivity relative to Western European countries is found to depend heavily on greater opportunities for scale-economies of production. Inter-country differences in the age and sophistication of machinery contribute only very partially to relative productivity performance but the US does benefit from higher levels of physical capital per worker. In terms of human capital, American enterprises are well-served by access to a relatively large supply of technical graduates which helps to compensate for deficiencies at lower levels of vocational education and training. The comparisons suggest that the present development of a US-style mass higher education system in Britain could make a positive contribution to British productivity performance. However, the traditional ‘American model’ of production organisation based on a semi-skilled shopfloor workforce is not relevant to the current and future skill needs of most British manufacturing employers.

Type
Articles
Information
National Institute Economic Review , Volume 162 , October 1997 , pp. 85 - 98
Copyright
Copyright © 1997 National Institute of Economic and Social Research

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Footnotes

∗

We are glad to acknowledge financial support for this project provided by the Leverhutme Trust and the RAND Corporation. We also thank Rachel Kaganoff, Dirk Faltin and Yvonne Stremmer for excellent research assistance at different stages of the project. We are grateful for useful comments on earlier versions of this and related papers by Steven Broadberry, Joe Hight, Harm van Lieshout, Mary O'Mahony, Sig Prais and Karin Wagner and by seminar participants at NIESR; Science Policy Research Unit, Sussex; London School of Economics; and the US Department of Education, Washington, DC. Responsibility for any errors in the article is of course ours alone.

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