The stagnation of productivity in the developing world, and indeed,
across the globe, over the last two decades dictates a rethinking of
productivity measurement, analysis, and policy. This volume presents a
'second wave' of thinking in three key areas of productivity analysis
and its implications for productivity policies. It calls into question
the measurement and relevance of distortions as the primary barrier to
productivity growth; urges a broader concept of firm performance that
goes beyond efficiency to quality upgrading and demand expansion; and
explores what it takes to generate an experimental and innovative
society where entrepreneurs have the personal characteristics to
identify new technologies and manage risk within an entrepreneurial
ecosystem that facilitates them doing so. It also reviews arguments
surrounding industrial policies. The authors argue for an integrated
approach to productivity analysis that incorporates both the need to
reduce economic distortions and generate the human capital capable of
identifying the opportunities offered to follower countries and upgrade
firm capabilities. Finally, it offers guidance on prioritizing policies
when there is uncertainty around diagnostics and limited government
capability.