Productivity accounts for half of the differences in GDP per capita across countries. Identifying policies to stimulate it is thus critical to alleviating poverty and fulfilling the rising aspirations of global citizens. Yet, productivity growth has slowed globally over recent decades, and the lagging productivity performance in developing countries constitutes a major barrier to convergence with advanced-country levels of income.
The World Bank Productivity Project seeks to bring frontier thinking on the measurement and determinants of productivity to global policy makers. Each conference and volume in the series explores a different aspect of the topic through dialogue with academics and policy makers, and through sponsored empirical work in our client countries. The Productivity Project is an initiative of the Vice Presidency for Equitable Growth, Finance and Institutions and led by the Chief Economist, William Maloney.
The first volume in the series, The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up, focuses on the roughly half of overall productivity growth that is driven by firms adopting new technologies, products, and processes. In particular, it examines an under-researched “innovation paradox” -- returns on technological adoption are thought to be extremely high, yet countries appear to invest little, implying that this critical channel of productivity growth is underexploited. The analysis sheds light on how to address this paradox and leads to rethinking around government policies that are intended to support innovation at the firm level.