Productivity improvement needs market confidence, and more importantly innovation.

Many developed economies are experiencing a decline in productivity. The Internet has solved most of the issues of transaction costs and information equality. Improved productivity can improve potential for future economic development. However, before improving productivity, the unemployment rate must be kept low. Because if labour force becomes more efficient, lack of market confidence will create more unemployment. Low unemployment rate may restore confident the market; when the market is confident demand for goods and services will increase to catch up the increased production due to efficiency improvement, and the unemployment rate will not increase meanwhile. Therefore, before considering to improve production efficiency, to restore market confidence is critical. Moreover, the problem of production efficiency cannot be merely solved by government policies. The key to improve production efficiency is innovation. The biggest leap of productivity in the developed world is when recovering from World War II, because they inherited the innovations taking place during the war.