This working paper reviews a wide a range of policies that impact productivity growth, looking at the incentives and capabilities of businesses and workers and the impact of public policy. The authors argue that reviving productivity growth is crucial to addressing long-term socio-economic challenges, but will require a tailored and multi-pillared approach. 

The paper reviews research on productivity developments and their drivers, noting that the gap between frontier firms and laggards has widened markedly in the 21st century. It also highlights previous OECD research that found policy weaknesses may be stifling productivity growth in OECD economies. The paper offers guidance for policymakers and suggests areas where more research is required. 

Key findings

• There are large and growing productivity gaps between firms at the global frontier and all others.
• Policy weaknesses may be stifling productivity growth in OECD economies.
• The productivity impact of artificial intelligence remains uncertain and requires further research.
• Digital technology adoption remains incomplete and varies significantly across countries.
• Improving financial systems promises strong productivity benefits, particularly in intangible-intensive sectors.
• The "human side" of productivity, including skills and diversity, accounts for about a third of the gap between leading and typical firms.

Key recommendations

• Governments should adopt a multi-pillared approach to productivity reform that affects both the incentives and capabilities of businesses and workers.
• Public policies should recognise the different challenges facing firms at the technology frontier and those that are lagging behind.
• Policies should foster a productive allocation of resources, including capital and labour.
• Governments should continue to investigate the impacts of AI on productivity growth.
• Public policies should improve access to finance, especially for intangible-intensive sectors.