to those areas and aspects which depend upon 

 R&D in rather direct and obvious ways. 



Productivity 



Productivity expresses the relationship 

 between the quantity of goods and services 

 produced (the output) and the resources (e.g., 

 labor, capital, land, and energy) used to produce 

 them (the input). One of the most commonly 

 used indices of productivity is "output per man- 

 hour," which relates output to the input of labor 

 time. R&D contributes to productivity by 

 providing advances in technology which increase 

 output per man-hour. All studies of the effects 

 of R&D on productivity growth conclude that 



there is a direct relationship which is "positive, 

 significant, and high."" 



Indices now available do not permit compari- 

 son of absolute levels of productivity in dif- 

 ferent countries, except in the case of certain 

 individual industries. Instead, comparisons are 

 limited to changes in productivity which occur 

 over time in individual countries. Normalized 

 data for changes in relative labor productivity in 

 manufacturing are presented in figure 8 for the 

 United States, United Kingdom, France, West 

 Germany, and Japan. 



" Research and Develo/tmenl ami Eanmmic (jrowlh/Praduclivily, 

 Papers and Proceedings of a Colloquium, National Science 

 Foundation, NSF 72-303, December l"?!. 



Figure 8 



Productivity In Manufacturing Industries, 



by Country, 1960-71 [Index 1960 = 100] 



(Index) 

 350 



.1 



250 



Japan 



200 



150 



.* W Germany ^^.•* 

 -•• ^ ,• France 



^^.••' UK ^^• 



I960 '61 '62 '63 '64 '65 66 '67 

 SOURCE: U-S. Department ot Labor. 



69 '70 '71 



Figure 9 



Unit Labor Cost in Manufacturing Industries, 



by Country, 1960-71 [Index 1960 = 100] 



(Index) 

 160 



X 



_L 



_L 



J L 



-90 

 1960 61 '62 '63 '64 '65 '66 67 



SOURCE: US- Department ol Labor. 



'69 '70 71 



13 



