"What explains the stark difference in effects, and especially why training had a compounding benefit? In particular, why didn’t access to modern manufacturing technology alone produce larger productivity gains?
Giorcelli finds that firms which received management training implemented a number of new practices that augmented the long-run efficacy of their new technology. They invested much more in worker training and machine maintenance. Machine downtime and worker injuries dropped significantly in these firms. More broadly, before the Productivity Program, less than 6% of firms reported training their workers, or spending on marketing, on their balance sheets. Afterwards, nearly 100% of firms that received training reported both of these activities on their balance sheets, while firms that received only technology did not adopt either of these practices. It seems likely both of these led to less wastage and higher sales in the short run. Moreover, in the long run, firms that received training reshaped their business organization; they expanded to have more plants, they increased their manager-to-worker ratio, and they were more likely to be professionally-managed rather than family-managed. Each of these decisions may also have increased productivity over the long run."
