Manufacturing and labor productivity as key elements of economic recovery in the course of the Marshall Plan implementation

Abstract

The article addresses the best practices of manufacturing recovery and productivity improvement in the course of the Marshall Plan implementation in Europe post-World War II. It outlines the three most essential elements of the economic crisis on the continent in 1947: low manufacturing level, inflation, and inability to urgently cover the necessary imports from other parts of the world, especially from the United States of America. The following main reasons for falling labor productivity are determined: malnutrition, long break in the training of qualified workers for manufacturing, and equipment destruction and obsolesce. The article defines and characterizes three phases of manufacturing recovery in the course of the Marshall Plan implementation: elimination of the critical shortage of food, raw materials, and substitute goods, new investment program, and solution to productivity problem. Public savings supplemented by the substantial financial assistance of supporting partner funds are determined to be the most essential source of domestic investment funds in the countries covered by the Marshal Plan. Private capital mostly consisted of the funds of private companies. The following factors impacting productivity are examined: investment, technology and maintenance, attitude and motivation, managerial competence and training, personal relationship, labor efficiency, full employment, markets, diversification, competition, and governmental measures. The article shows the losses incurred by russian military aggression to Ukrainian industry and infrastructure, namely, direct losses to retail trade, manufacturing, land fund, agriculture, infrastructural facilities, railway infrastructure, and critical infrastructure. In particular, as of 1 September 2022, the estimated total direct losses of companies’ assets are $9.9 billion, which is the third largest item of direct infrastructural losses accounting for about 10% of the total losses. Taking into account massive russian missile attacks, the situation in the energy sector of Ukraine is especially hard since the problems with electricity cause disruption in the operation of many companies and risks for manufacturing and make impossible the continuous economic activity and the keeping of commitments to counteragents and customers, inevitably leading to the GDP decline. The article substantiates the reasonability of the consideration of the Marshall Plan implementation in Europe in the process of the post-war recovery of Ukraine. In particular, the factors like technological assistance, investment in modern industrial and energy equipment, establishment of the qualitative process of employee training and retraining, and labor efficiency will play an important role in the process of Ukraine’s post-war recovery. Significant destruction of Ukraine’s manufacturing and infrastructure caused by russian military aggression constitutes a powerful negative factor since they require much effort and funds to recover. However, they can also be considered from another standpoint – as a chance to modernize the destroyed companies and infrastructural facilities in the course of their reconstruction.