Some of the important factors influencing industrial productivity are : (i) Technological Development (ii) Quality of Human Resources (iii) Availability of Finance (iv) Managerial Talent (v) Government Policy (vi) Natural Factors!

The factors affecting industrial productivity are inter-related and inter­dependent and it is a difficult task to evaluate the influence of each individual factor on the overall productivity of industrial units.

The impact of certain important factors is briefly examined below:

(i) Technological Development:


Technological development plays an important part to influence the industrial productivity. “The application of motive power and mechanical improvements to the process of production has accelerated the peace of industrialisation to an unprecedented degree, and has given us the vision of the vast and unexplored frontiers that still lie ahead of us in the realm of applied science and technology.”

The technological factors include degree of mechanisation, technical know-how, product design, etc. Improvement in any of the technological factors will contribute towards the increase in industrial productivity. In India, application of mechanical power, introduction of semi-automatic and automatic machines, improvements in the production processes, better Morale and Productivity integration of production processes and higher degree of specialisation have contributed a lot towards the increases in industrial productivity.

(ii) Quality of Human Resources:

Manpower plays a significant role. In raising industrial productivity in most of the industries. If the labour force is not adequately qualified and/or is not properly motivated, all the steps taken to increase the industrial productivity will have no result the employees’ performance and attitudes have an immense effect on the productivity of any industrial unit. Three important factors which influence the productivity of labour area (a) ability of the worker, (b) willingness of the worker, and (c) the environment under which he has to work.

(iii) Availability of Finance:

The ambitious plans of an industrial unit to increase the productivity will remain mere dreams if adequate financial resources are not available to introduce technical improvements and give appropriate training to the workers.


The greater the degree of mechanistion to be introduced, the greater is the need for capital. Capital will also be required for investment in research and development activities, advertisement campaign, better working conditions to the workers, up-keep of plant and machinery, etc.

(iv) Managerial Talent:

The significance of managerial talent has increased with the advancement in technology. Professional managers are required to make better use of the new technological development. Since the modern enterprises are run on a large scale, the managers must possess imagination, judgment and willingness to take imitative.

The managers should be devoted towards their profession and they should understand their social responsibilities towards the owners of the business, workers, customers, suppliers. Government, and the society this is essential if the managers want to manage their organisations effectively. The managers should have conceptual, human relations and technical skills in order to increases the productivity of the enterprise.

(v) Government Policy:

The industrial policies of the Government have an important impact on the industrial productivity; The Government should frame and implement such policies which create favourable conditions for saving, investment, flow of capital from one industrial sector to another and conservation of national resources. Certain industries may be granted protection, and incentives may be given to the others for the development in view of the national interest.


The Government should flow the taxation policy which does not discourage the further expansion of business. It is also the duty of the Government to check the growth of monopolistic enterprises so that the interest, of the consumers and the workers are not jeopardise.

(vi) Natural Factors:

The natural factors such as physical, geographical and climatic exercise considerable impact on the industrial productivity. The relative importance of these factors depends upon the nature of the industry, goods and services produced and the extent to which physical conditions are controlled.

“The geological and physical factors play a very dominant role in determining the productivity of extractive industries likes coal-mining in which the physical output per head is greatly influenced by the depth of the coal-mines, the thickness of the coal seams, the topography of the region and the quality of coal available. In other industries like tailoring, grain-milling, hosiery, soap-making, confectionary, medium and coarse cotton manufacturing, etc., the geographical, geological and physical factors exercise little influence on productivity”.