" Higher productivity leads to the prosperity of a nation". In the light of this statement. Point out the significant of productivity. The major determinants of productivity in an enterprise?

Significance of Productivity or Importance of Productivity :

Importance of productivity can be explain with the help of following factors :

(1) Higher standard of living :

     Higher productivity leads of prosperity of a nation. In fact, gains of higher productivity can be pass on to customers in form of lower prices of products and services. This enables people to consume more goods and services with the same money income and this adds to their standard of living. 

(2)Cost reduction and profit maximisation :

       Through more economical use of resources as a result of higher productivity, a business enterprise is enable to reduce cost of production and maximise profitability. Profit also increases because higher productivity requires elimination of waste in all forms. 

(3) Generation of more employment opportunities :

                 Large scale unemployment cannot be eliminated without increasing productivity in agriculture, industry and others spheres of human activities. Through attaining higher productivity an enterprise can survive and grow better and help the society by generating more employment opportunities. 

(4) Higher wages and higher dividends :

         Gains of higher productivity can be shared skill workers in the form of higher wages ad salaries for workers. Increases in productivity leading to higher productivity entitles shareholders to higher dividends. 

(5) Export earning :

             More and qualitative productivity as a result of higher productivity helps in export promotion adding to valuable foreign exchange  reserves for the country. 

(6) Increase in national income:

                Increase in productivity means better utilisation of countries resources.  It often leads to an increase in national productivity that national income, resulting in overall growth and prosperity of the nation. 

(7) Stranger competitiveness :

              Higher productivity gives a strong competitive edge to an enterprise for survival and growth in highly competitive globalized economy of today.