Introduction

Productivity is the measure of production efficiency, such as labor and capital and how it is being used in an economy to produce a given level of output. It is considered a key source of economic growth and competitiveness, and as such serve as the basis for international comparisons and country- performance assessments (Krugman, 1994). At the industry level, productivity growth is very important as it allows an industry to compete with other sectors of the economy for resources (labor, capital and raw materials) and maintain international competitiveness. There are different measures of productivity and the choice between them depends either on the purpose of the productivity measurement and/ or data availability.

Productivity measures include GDP per hour worked and multifactor productivity (MFP), also known as total factor productivity (TFP), which measures the residual growth that cannot be explained by the rate of change in the services of labor, capital and intermediate outputs. MFP is often interpreted as the contribution to economic growth made by factors such as technical and organizational innovation (OECD, 2008). In development economics, labor productivity is one of the major determinants of productivity growth. It measures economic growth and output of a country and has strong implications for economic growth (Heshmati and Rashidghalam, 2016).

Continuous increase in labor productivity is a critical factor for development while ST and skills development are essential for increasing labor productivity. Over time, developed nations have been able to diversify away from low- productivity sectors (agriculture and traditional products) and, as labor and other resources move from agriculture into modern economic activities, overall productivity rises and incomes expand (McMillan et al., 2014).

Empirical evidence in this book confirm that productivity increase could be attributed to ST and varying factors at individual level (health, education, skills and experience), at enterprise level (management, investment in plant and equipment, occupational safety and health) and at national level (national macroeconomic and competition policies, economic growth strategies, policies for business environment, level of investment in public infrastructure and education).

In Africa, despite the unprecedented high, sustained economic growth witnessed in the last two decades, African states have been experiencing productivity- reducing SC (Rodrik and McMillan, 2011). On average, a firm in Africa produces about $3,000 of output per worker compared to China, Indonesia, Malaysia and Thailand where firms produces $6,500 of output per worker.