Productivity - What is it?

Example: It takes 2 men 1 day to cut down 5 trees to build houses with hand saws.  Then they buy chain saws. Now 2 men cut down 20 trees in 1 day.  Since you can cut down trees faster, the supply of wood increases and the cost of wood goes down.  The lumber jacks make less money per tree but make more money overall by cutting down more trees in a day.

When you produce more in less time, that is an improvement in productivity.  Productivity increases with faster, more efficient equipment that allows you to do more work in less time.