21 TFP growth has remained subdued at a rate of expansion of around 1% per annum. The determinants of TFP growth are not fully understood but among others, Robert Gordon 22 has argued that TFP growth occurs in waves, driven by major innovations.
So far, despite its great promise, the ICT revolution of the 1990s has not led to a pronounced and sustained pick-up in productivity growth in any of the major industrialised countries. Finally, the rate of capital deepening (the increase in the amount of capital per worker) has been weak in recent years reflecting low aggregate demand, financing constraints and weak business confidence.