The Productivity Challenge of the 1980's

The rate of technological innovation and the technological leadership of the United States declined during the 1970's. Many industries which grew dramatically prior to the 1970's (for example, consumer electronics, automobiles, footwear, and steel) are now problem industries. Areas where technological leadership has been maintained are increasingly challenged by strong foreign competition. Although national productivity largely depends on the performance of business, it is the Government that establishes the broad economic, legal, and social frameworks within which business operates. Despite this interdependence, Government and the private sector seem, at times, to be more at odds and less trusting of each other. While the basic adversary relationship between the sectors will always exist, this relationship must be converted to one of trust and cooperation. The Federal Government has many ongoing programs to encourage productivity which are administered by individual Federal agencies at a cost of almost $1 billion annually. The programs support research and development, information, and capital related to various aspects of productivity improvement. In response to a request from the Joint Economic Committee, GAO assisted in drafting proposed legislation to create a National Productivity Council. The proposal includes a ten-point program, which is designed to develop a national productivity program to guide Federal efforts for improving private sector productivity. If the trends which have caused so many of the current economic problems are to be reversed, a greater spirit of cooperation among all sectors of the economy must be developed.