A layman's theory: First: total_factor_productivity = price_of_output/(0.7labor_cost + 0.3capital_cost) Let's say we're in a state of ideal competition - the

A layman's theory: First: total_factor_productivity = price_of_output/(0.7labor_cost + 0.3capital_cost) Let's say we're in a state of ideal competition - the minute some company improves productivity , which leads to reducing the input costs they put into the process by X% , other companies copy that process, which lead to the price going down by X%. And on the other hand, companies insulated from competition usually don't grow their productivity. So maybe the economy has many more of those 2 types of companies and that's mirrored in the economic statistics ?