Productivity is an important part of the economy. But what is it? This is Dan. He runs a local bakery and employs five bakers. Together they work 40 hours a day and make 500 buns. That's 12 and a half buns for every hour worked. Dan buys a better mixer and trains the team. With the same people and hours, they now make 750 buns. That's 50% more buns per hour. Their productivity has risen. But extra buns are not the same as extra profit. Dan needs to sell them first. Every year, wages and employment costs, energy, ingredients and rent can rise. Dan must pay those costs from the money the bakery earns. If they rise, they can use up some or all of the extra money earned from making and selling more buns. The mixer costs money too. Selling prices and how many buns customers buy matter as well. So higher productivity creates an opportunity, not a guarantee of higher profit or higher pay. Across the economy, productivity usually measures the value added per hour, not just the number of products. It's about making work more productive, not making people work harder. Between 1997 and 2024, UK output per hour rose by an estimated 40.7%. But how much of that progress reaches businesses, workers and households? Explore the evidence at UK Facts.