Globalisation in the OECD has had a greater impact on regions than on nations as a whole. This is also true for the case of Mexico and Morelos. Technological change and the gradual reduction of the working-age population are two main challenges affecting the economic performance of many regions. While some regions are able to adapt to these challenges and reap the benefits of globalisation, others remain stagnant and struggle to compete in the global arena. In Morelos, labour productivity decreased from 2003 to 2010, and started recovering in 2010. Technological change has led to the rapid growth of service industries and the knowledge-based economy, allowing regions specialised in the production of information and knowledge to become more competitive in the global economy.