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New findings on the Factors affecting Innovation and Productivity in the Caribbean

Explore microeconomic sources driving productivity growth & efficiency in Caribbean. Focus on resource allocation dynamics within firms. Analyze heterogeneity among firms in innovation. Importance of data for Compete Caribbean initiative.

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New findings on the Factors affecting Innovation and Productivity in the Caribbean

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  1. New findings on the Factors affecting Innovation and Productivity in the Caribbean Matteo GrazziCompetitiveness and Innovation Division

  2. Development Challenge in LAC Today is 13.2% PIB pc relative to the USA was 14.8% in 1960 Source: World Bank Difference is bigger than in 1960!

  3. What is the problem? Low Productivity Growth

  4. What is the problem? Index of Productivity Relative to US (1960=1) Source: Fernandez-Arias (2014) Low Productivity Growth

  5. The hypothesis we explore… Two microeconomic sources of productivity growth drive aggregate efficiency over time: 1 Efficiency gains that occur within firms, due to better production methods, organization, innovation at the plant-level, learning and capability development, etc. Focusing on aggregate data, we miss the effects of resource reallocation and within firms dynamics

  6. The hypothesis we explore… Two microeconomic sources of productivity growth drive aggregate efficiency over time: 2 Efficiency gains derived from the reallocation of resources from less productive firms to more productive ones due to competition and the processes of (Schumpeterian) creation and destruction - entry (exit) of more (less) efficient firms. Focusing on aggregate data, miss the effects of resource reallocation and within firms dynamics WE FOCUS ON 1 WE FOCUS ON 1

  7. The reason to focus on 1 Syverson 2011 Hsieh and Klenow 2009 Grazzi & Pietrobelli, 2016, Busso et al., 2012 Huge Heterogeneity among firms in productivity and innovation (also within sectors)

  8. The reason to focus on 1 Many low productive firms Few highly productive firms Huge Heterogeneity among firms in productivity and innovation (also within sectors)

  9. The importance of dataThe Compete Caribbean contribution

  10. What do we know about innovation in the CaribbeanNew evidence from….

  11. Content of the book (TBC)

  12. Main results of the chapters not presented

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