Efficiency

Efficiency is the ratio of useful output to total input in a system, measuring how effectively resources are converted into desired results. It is often expressed as a percentage and is context-dependent, since the relevant inputs, outputs, and boundaries can vary.

In engineering and physics, efficiency describes how well a device or process converts energy or resources into useful work. It is bounded by physical laws and theoretical maxima (for example, 100 percent in an ideal process). Common forms include mechanical, thermal, electrical, and overall system efficiency, each reflecting different loss mechanisms such as friction, heat, or resistance.

In economics, productive efficiency occurs when goods are produced at the lowest possible cost given available resources. Allocative efficiency occurs when the mix of goods aligns with consumer preferences, typically when price equals marginal cost. Pareto efficiency is a related concept indicating that no one can be made better off without making someone else worse off.

In computing and information systems, efficiency often refers to algorithmic efficiency—minimizing time and space complexity—and to system efficiency in terms of throughput, latency, and resource usage.

Measuring efficiency requires clear boundaries and objectives. Factors influencing efficiency include technology, process design, quality of information, and incentives. Improvements can arise from optimization, automation, standardization, and data-driven decision making, but may trade off with resilience, adaptability, or quality.

Applications span energy policy, manufacturing, transportation, and environmental management, where efficiency improvements can reduce costs and environmental impact while supporting broader sustainability goals.