Structural productivity

From CEOpedia | Management online
Structural productivity
See also

Structural productivity is a relation of final result of particular activity to the cost of performing this activity. Here you need to take into account the presence of settlement keys. They are used to divide the final result on each type of activity. This takes into account the principle of appropriateness of cost for i-th activity and its share in final results. Therefore, it is recommended that the primary settlement key was the productive cost indicator, since it points to the economic use of resources.

Applications

The structural productivity index (SPI) is a measure of the productivity of an economy that takes into account the structure of the economy, including the relative importance of different sectors and industries. The SPI is calculated by comparing the actual level of output in an economy to the level of output that would be expected if the economy were perfectly efficient.

The following are some of the key applications of the SPI:

  • Assessing economic growth: The SPI can be used to measure the efficiency of an economy over time, and to identify areas where the economy is underperforming or overperforming relative to its potential.
  • Identifying structural changes: The SPI can be used to identify changes in the structure of an economy, such as shifts in the relative importance of different sectors or industries.
  • Benchmarking performance: The SPI can be used to compare the performance of different economies and to identify best practices and areas for improvement.
  • Evaluating the impact of policy: The SPI can be used to evaluate the impact of different policies, such as trade agreements or tax policies, on the efficiency of an economy.
  • Targeting investment: The SPI can be used to identify areas of the economy where investment is needed to improve productivity and achieve greater economic growth.
  • Identifying areas for efficiency improvement: The SPI can be used to identify areas of the economy where efficiency can be improved, and to prioritize investment and policy decisions accordingly.
  • Assessing the impact of external factors: The SPI can be used to measure the impact of external factors such as a crisis, war or natural disasters on the economy.

In summary, the structural productivity index is a useful tool for measuring and evaluating the efficiency of an economy, and for identifying areas where productivity can be improved. It is widely used in the academic, government and private sectors for economic and policy analysis.

The computational formula

\(P = { S_n \over {\sum KM_i} } \)

\(P_i = {S_{n_i} \over KP_i}\)

where:

  • P - general structural productivity
  • Pi - structural productivity of i-th type of activity
  • KMi - cost of i-th activity
  • Sni</sub - sales revenue settled on i-th type of activity.

This indicator can be interpreted as a measure of ability to produce effects, since a single factor can create complex manufacturing effect. The purpose of the productivity calculations is to evaluate the productivity of manufacturing factors of each type of activity. Productivity can have also the diagnostic function and inform of existence of synergistic effect.

References