Title | Productivity - GDP per hour worked. Purpose Target. |
Associated Target | To rank in the top quartile for productivity amongst our key trading partners in the OECD by 2017. |
Brief Description | Increased competitiveness will be at the heart of a faster growing Scotland. Labour productivity (as measured by GDP per hour worked) provides an effective, internationally recognised and comparable measure of competitiveness. Progress against the target will be measured by ranking Scotland's level of labour productivity against the countries of the OECD. Scotland currently ranks in the second quartile. |
Strategic Objective(s) to Which Indicator Relates | This indicator informs progress in relation to all five Strategic Objectives: Wealthier and Fairer;
Healthier;
Safer and Stronger;
Smarter; and
Greener. |
More Detailed Definitions |
Definitions of Keywords | Labour productivity - defined as Gross Domestic Product ( GDP) per hour worked - measures the amount of goods and services (output) produced from an hour of work. The most productive economies can produce higher levels of output from an hour of work. Gross Domestic Product ( GDP) is a measure of the value added to materials and other inputs in the production of goods and services by resident organisations; before allowing for depreciation or capital consumption. In accordance with National Accounting principles, the oil and gas sector are excluded from the analysis as this is not attributed to any one area of the UK - termed "extra-regio" activity. GDP figures for Scotland exclude North Sea oil and gas. Net receipts from interest, profits and dividends abroad are also excluded. There are two measures of GDP, market prices and basic prices. The estimates produced for Scotland are measured in basic prices, which excludes taxes less subsidies on products (taxes on products include VAT and excise duties). Gross Value Added ( GVA) is another term for GDP at basic prices. The Organisation for Economic Cooperation and Development ( OECD) is an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy. 30 countries are currently members of the OECD - however, this is likely to increase in future years. |
Evidence Source | Data for OECD countries will be taken from the Productivity Statistics Portal section of the OECD web site. GDP per hour worked is measured using: - GDP at current prices ($ US) and Purchasing Power Parities ( PPP); and
- Total number of hours worked is average hours worked per person, multiplied by the number of people in employment.
Labour Productivity is measured by dividing GDP by total hours worked. The OECD only provide a figure for the UK. In order to estimate labour productivity in Scotland, regional accounts data from the Office for National Statistics ( ONS) are used to identify Scotland's productivity performance relative to the UK. In 2005, the most recent data, Scotland's labour productivity was 97.5% of the UK level. |
Baseline and Past Trends | Baseline The most recent productivity data for OECD countries are for 2006 (rankings are shown in Chart 1). However, the baseline for this target will be taken using 2007 data, which will be available in Autumn 2008. Scotland's labour productivity is calculated using the ONS productivity measures by region. Chart 1 is calculated using 2005 ONS data (the most recent data), where Scotland's GVA per hour worked was 97.5% of the UK level. Using this approach, Scotland would rank 14 th out of 30 countries (Greece was not included as 2006 data are not available) - this would place Scotland at the bottom of the second quartile. Chart 1: GDP per hour worked, 2006 (Index:USA=100) 
Source: Organisation for Economic Co-operation and Development : Office for National Statistics
Note: Data for Scotland is for 2005. Data for all other countries is for 2006 Trends Chart 2 presents Scotland's ranking in 1999 and 2005. In 1999 Scotland ranked 12 th, and in 2005 Scotland was ranked 13 th. However, Luxembourg is not included in this table - their inclusion in 2005 would reduce Scotland's ranking to 14 th. This puts Scotland at the bottom of second quartile. Chart 2: GDP per hour worked, 1999 & 2005 (Index: USA=100) 
Sources: Organisation for Economic Co-operation and Development ; Office for National Statistics |
Methodology | Figures for OECD countries are calculated by the OECD. The OECD only produce productivity figures for the UK. In order to estimate labour productivity in Scotland, regional productivity data from the Office for National Statistics ( ONS) is used to identify Scotland's productivity performance relative to the UK. In 2005, the most recent data, Scotland's labour productivity was 97.5% of the UK level. The role of power purchasing parity ( PPP) in calculating international comparisons of labour productivity is to convert the countries' national currencies into a common currency (here, US$) and to eliminate the differences in price levels. This results in comparable measures of real output that can be used for international comparisons. |
Data Ownership and Quality Assurance | The productivity measures by region are a National Statistics publication. ONS provide the OECD with relevant data for the UK. |
Publication of Data | Labour productivity data are produced annually be the OECD. The 2007 figures for the OECD countries will be available in Autumn 2008. Productivity data is published quarterly by the ONS. Data covering 2006 will be published in March 2008. |