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Perspectives on Global Development 2014

Boosting Productivity to Meet the Middle-Income Challenge

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Developing economies continue to grow faster than more advanced countries. Non-OECD countries’ share in world GDP surpassed that of OECD countries in 2010. Since its first edition in 2010, the annual Perspectives on Global Development has investigated the trends in “shifting wealth”, the increasing economic weight of developing countries in the world economy. “Shifting wealth” has received a boost through the rise of China, which has also led to positive spillover effects on developing economies that supply China’s demand for resource-based products and intermediates. However, even at their higher rates of growth since 2000, the per capita incomes in developing countries – including many middle-income countries – will not reach the levels of developed countries by 2050. Boosting productivity growth in middle-income countries could stem this trend and is the focus of this report. At the same time, this growth needs to be inclusive so a real convergence in living standards can take place.

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Improving competitiveness in manufacturing industries

OECD Development Centre

This chapter begins with a discussion of the important role of the manufacturing sector and estimates productivity growth rates in several key manufacturing industries in selected middle-income countries. The second section looks at ways to foster a more competitive business environment that could boost manufacturing productivity in middle-income countries. The chapter then moves on to look at targeted policies to improve competitiveness at the firm level. The final section of the chapter addresses energy and carbon efficiency as additional dimensions of competitiveness not always internalised by firms. This chapter uses multiple measures of competitiveness to better describe how firms perform.

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