Productivity Measurement in the Digital Age

Mismeasurement of productivity is one possible explanation for the global productivity slowdown in recent decades. This article discusses the challenges of measuring productivity in the digital age. The article covers some background about the productivity slowdown and about productivity measurement, the pressure that the growth in the digital economy is putting on productivity measurement, some estimates of mismeasurement from other countries, and the implications for New Zealand. The main conclusion is that, despite measurement issues, the productivity slowdown in New Zealand and elsewhere cannot simply be written off as measurement error. A further conclusion is that the digital economy has many benefits that fall outside conventional productivity measurement.