1. Labor Productivity

2. Definition Labor productivity : Productivity per hour- worked:

3. Definition Importance of labor productivity: GDP per-capita = Productivity per hour worked x Total hours worked x Participation rate x Share of adult population to be able to work

4. Definition Factors influencing on productivity growth: Capital deepening Labor quality Total factor productivity

5. US vs EU

6. US productivity growth Source: D. Jorgenson et al. (2008)

7. US sources of productivity From 1995-2000 : ICT From 2000 on : Capital deepening

8. EU: empirical evidence Source: van Ark et al. (2008)

9. EU: empirical evidence Source:R. Inklaar et al.. (2008)

10. EU: empirical evidence Source: van Ark et al. (2008)

11. EU: empirical evidence Source: van Ark et al. (2008)

12. EU 1950 -1973 : Catching-up period. Technology imitation and new institutions 1973-1995: Productivity slowdown. Reduction: labor force participation rate and working hours 1995-2006: Europe’s falling behind. Slower ICT diffusion

13. EU vs US: sources of prod. growth Source: van Ark et al. (2008)

14. EU vs US: sources of prod. growth Source: van Ark et al. (2008)

15. The puzzle of service sector Source: van Ark et al. (2008)

16. The puzzle of service sector Source: van Ark et al. (2008)

17. The puzzle of service sector Source: R. Inklaar. (2008)

18. The puzzle of service sector Source: R. Inklaar. (2008)

19. The puzzle of service sector Source: R. Inklaar. (2008)

21. Strategies for the EU Find mechanism to exploit service innovations Emphasis on human resources Services: less standardized and more customized production.