Discussions about the economy generally touch upon jobs, wages, capital, and other measurements, but they don’t often recognize “innovation.” Arguably the most important metric in assessing an economy’s growth, innovation helps to assess the ways companies are becoming more efficient in their practices. And last year, it reached its highest mark since 2010.

The official measurement of , multifactor productivity, grew 1 percent last year – the fastest growth rate since 2010. Multifactor productivity measures the growth in output after measuring the effect of capital and labor. In other words, without adding more employees or capital, how are firms increasing output?

Productivity is crucial because it improves Americans’ standard of living under all circumstances. This occurs because as firms increase their profit margins through more efficient methods, they are able to increase employee salaries and/or lower prices. Either way, consumers cash in more money than they would with lower productivity.

Arizona Tech Council president and CEO Steven Zylstra highlighted the reasons why productivity has increased at its highest rate in nine years.

“I would attribute a significant amount of that enhanced productivity to technology,” Zylstra said. “I think all sorts of technologies are being used to streamline making things more productive than they historically could have been. I think that’s just going to increase significantly as we move into an era of AI and machine learning because so much will be able to be done with so little.”

Between 2000 and 2007, the U.S. experienced, on average, a 1.4 percent growth rate in productivity, which is much higher than the 1 percent growth rate last year. However, economic skeptics shouldn’t forecast an economic slowdown. Zylstra points out that this period followed the dot-com boom; because the internet was arguably the greatest technological advancement of all time, comparing the two growth rates isn’t a reasonable assessment.

With the rise of smartphones, robotics, and information technology, Zylstra believes we are well-positioned to ride this productivity wave moving forward. In fact, some of this growth even , which ranks in the top third of US states for innovation.

“Here in Phoenix, we’re in the process of outfitting the most significant chip processing plant on the planet,” he said. “It’s going to produce semiconductors with seven nanometer feature sizes. The amount of capability that we’re able to put in people’s hands is mind-boggling. I think robotics and automation, software and IT, and the massive processing power have been some of the main drivers in enhancing our productivity.”

U.S. productivity is in its best position since 2010, and the economy will react accordingly. With the development of more efficient technologies and practices, everybody wins.

The post U.S. innovation grows at highest rate since 2010 appeared first on Â鶹´«Ă˝Ół»­.

Phoenix had the highest small-business wage growth rate among the major metropolitan areas in the nation, according to a Paychex-IHS Markit report. The study analyzed the top twenty metropolitan areas in the nation and determined that Phoenix had the fastest wage growth by over half a percentage.

Phoenix small-businesses posted a 4.92 percent wage increase over last year’s wages. Moreover, small-business employees in Phoenix generated over $90 more in weekly earnings than the second-ranked city, Riverside, CA. Overall, small-businesses in the western region led all other regions in wage growth.

According to the US Small Business Administration, 99.4 percent of Arizona’s businesses are small. Additionally, 44.5 percent of Arizona employees work for a small business, so this rapid wage growth impacts a large fraction of state workers.

NFIB state director Chad Heinrich asserted, “Small businesses are the bulk of our state’s economy, which is indicative of the strength of these businesses.”

Heinrich explains that the growing demand for employees is a main reason for the rapid wage growth.

“We have a very inviting business climate, which is everything,” Heinrich stated. “So when we look at the creation of a business climate that’s conducive to small business growth, we have to give credit to our state leaders — Governor Ducey, state legislators, and others – on their business-friendly policies.”

The optimism of small business-owners leads to more investment in their companies. The addition of capital investments and the consequential need for additional staff drives this wage growth.

“There’s more capital spending, and when that happens, the investment in people has to follow,” Heinrich asserted. “When we see optimism through the business owners, that leads to more capital, and with more capital, that leads to more people.”

Plus, this wage growth will likely translate to larger corporations as well. Heinrich highlights that this rapid increase will create a ripple effect among all businesses in the state.

Heinrich explained, “You’re going to see wage growth across the entire business sector. All businesses are competing for the same talent, so it will not be isolated to just small businesses.”

The universities also play an important role in this equation. As the local universities generate more talent, employers have a wider selection of potential employees. This allows small-businesses to get off the ground and expand into larger businesses.

Arizona continues to prove itself as the optimal state for small-businesses to launch and flourish. As wage growth and small business optimism rise, so will the success of businesses in the state.

The post Phoenix reports fastest small-business wage growth in nation appeared first on Â鶹´«Ă˝Ół»­.