Labor Productivity Developments in Austria in an International Perspective

After World War II, Austria, like other European countries, had for decades been improving its labor productivity, continuously catching up relative to the United States. Only then U.S. labor productivity grew at an accelerated pace from the mid-1990s to the mid-2000s on the back of new technologies implemented in distribution as well as finance and business services, did Austria – and in particular its service sector – fall behind. Unlike the U.S.A., Austria did not benefit from a technology-driven boom. By contrast, the productivity performance of Austrian manufacturing, without the production of information and communications technologies, is comparable to that in the U.S.A. and in Germany. Hence, to boost labor productivity in Austria, a high priority should be given to policies stimulating the diffusion of new technologies in the service sector.