underutilization
Underutilization refers to a situation in which available resources—such as labor, capital, facilities, or natural resources—are not used to their full productive potential. It is the opposite of full utilization and is commonly discussed in macroeconomics and operations management as slack in a system.
In economics, underutilization is closely related to capacity utilization and the output gap. Capacity utilization measures
Causes of underutilization include weak or volatile demand, misallocation of resources, regulatory or structural barriers, skills
Consequences include lower productivity and higher unit costs, reduced profitability for firms, slower economic growth, and
Mitigation strategies focus on increasing demand or reallocating resources. This can involve stimulating spending, retraining and