According to the latest Artificial Intelligence Index Report 2025 by Stanford University and data from the International Labour Office, labour productivity across leading economies is diverging in surprising ways. While the U.S. has posted modest but consistent gains, it's China and India that continue to dominate the global productivity rankings.
U.S. growth: stable, but not spectacular
From 2010 to 2024, the United States has maintained a relatively steady labour productivity growth rate, hovering between 0.2% and 3.1%. The peak occurred in 2010 at 3.1%, while recent years show more tempered gains of 1.5% annually from 2022 through 2024.
Asia accelerates: China and India lead the pack
China consistently outperforms other major economies, maintaining over 6% growth annually throughout the period. India also impresses, staying between 5.7% and 8%, signaling its strong demographic and technological momentum. In contrast, Japan and the EU powerhouses like Germany and Italy display flat or even negative trends in some years.
Europe struggles to keep pace
Italy, France, and Germany have experienced decade-long stagnation. Italy even dipped into negative territory multiple times—as low as -2.6% in 2012. These figures point to structural inefficiencies and slower innovation cycles that hinder productivity gains.
The AI factor: A hidden multiplier
With AI becoming a key productivity lever, the gap between tech-powered and traditional economies may widen. Models like OpenAI's o1 are already nearing human performance in complex tasks, suggesting a future where digital acceleration becomes a core productivity driver—not just a supplement.
Why this matters
Labour productivity is a key predictor of long-term economic growth, wage increases, and competitiveness. As China and India scale rapidly, the West must rethink investment in education, innovation, and AI integration to avoid being left behind in the next decade.
