TOTAL FACTOR PRODUCTIVITY: A MATHEMATICAL APPROACH TO ASSESSING INNOVATIVE ECONOMY DEVELOPMENT

Анотація

The article examines the economic essence and role of total factor productivity (TFP) in ensuring economic growth and increasing the competitiveness of countries in the modern global economy. It is shown that productivity is one of the key factors in the long-term development of economic systems, and the TFP indicator allows for a comprehensive assessment of the efficiency of using the main production resources - labor, capital and technology. Unlike traditional productivity indicators, which take into account only individual factors of production, total factor productivity reflects the interaction of all components of the production process and demonstrates the ability of the economy to increase production without a proportional increase in resource costs. Particular attention is paid to the relationship between TFP and innovative activity, technological progress and human capital development. The paper substantiates that the growth of total factor productivity is an important indicator of the effectiveness of economic policy and the level of institutional development of the state. It is determined that countries with a high level of TFP have greater potential for ensuring sustainable economic growth, developing innovations and strengthening positions in international markets. Particular attention is paid to the impact of modern technological trends, in particular digitalization, automation of production, the development of artificial intelligence and green technologies, on the growth of total productivity. It is shown that a further increase in the level of TFP largely depends on investments in human capital, research and development, infrastructure and institutional reforms. It is concluded that the formation of a favorable innovation environment is an important prerequisite for increasing the efficiency of resource use and ensuring long-term economic development

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