RELATIONSHIP BETWEEN INNOVATION AND LABOR PRODUCTIVITY IN THE MANUFACTURING INDUSTRY OF MEXICO
Keywords:Innovation, Labor productivity, Manufacturing industry, Declining returns, Gross fixed capital formation
The manufacturing industry represents the most important economic sector in Mexico, with an average contribution of 17% of the national GDP and a significant generation of formal employment. During the last years there has been a negative trend of the growth of labor productivity in this sector, which reflects obsolescence in the productive apparatus, so it is necessary to implement innovation processes as a fundamental element to face diminishing returns. The purpose of this research is to establish the relationship between innovation and labor productivity in Mexico's manufacturing industry. As a hypothesis, the existence of a positive correlation between innovation and labor productivity is considered. The existence of a relative but not determinant influence of the innovation in the labor productivity of the Mexican manufacturing industry was found, since the gross formation of fixed capital contributes more to it, and that the decreasing tendency of its levels of labor productivity is a reflection of structural failures and obsolescence in the productive apparatus, so that innovation represents a change in the technological trajectory for Mexican manufacturing activities, providing higher levels of labor productivity and competitiveness.
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