Search

Following decolonization, growth accelerated in the leading African economies with the emergence of industrial activity, the modernization of physical infrastructure, and the quickening of urbanization. However, by the mid-1970s this initial phase of catching up had run out of steam, and African countries entered a long economic twilight that extended through the mid-1990s. Since then, and for over a decade, Africa, has benefitted from a widely shared revival of economic activity. Some reasons for this revival are shared worldwide, including globalization, innovations triggered by the advent of the Internet and advances in semiconductor/digital technologies, expansionary monetary policies, and by the growth of Asian countries that accelerated industrialization and trade volume. Other causes are internal to Africa, such as greater stability, better-managed macroeconomic policy, more open economies, and improved human development indicators. But this new-found momentum cannot be taken for granted. In particular, the financial crisis of 2008–09 has weakened Africa’s principal Western trading partners. Export-led growth is no longer the recipe for all seasons. This paper sketches a strategy for African late starters that identifies the key objectives and policy initiatives appropriate for a post-financial-crisis environment where South-South trade and capital flows are taking on a greater salience.

Chile could well have space to increase its growth potential by 2 percentage points of Gross Domestic Product (GDP) per year. To do this, it would need to pay more attention to new sources of growth in natural resources, manufacturing, and services. In an increasingly globalized world, first-mover advantages have become more numerous and larger. Chile risks losing out, as a few recent high-profile cases suggest. Chile's total factor productivity growth can be raised by driving within-firm technological change closer to the global best-practice frontier more rapidly, especially in manufacturing. This would encourage the diversification of exports and boost Chile's supply response to global demand changes. Chile confronts obstacles in its processes of innovation, human capital accumulation, and investment. To overcome them, deep institutional changes are needed to develop a national innovation system, stronger and more equitable educational achievement, more flexible labor markets, and focused public investments that crowd in private business. Such an inclusive growth strategy is likely to yield better social outcomes than a strategy that attempts to confront social inequities head-on through more equitable access to public services without paying adequate attention to the demand for labor and generation of income. Chile could also try a new policy towards innovation, but it would need to be bolder in terms of the institutional design to maximize the chances of success.

OS; International audience; This chapter looks at the determinants of productivity growth, based on the following two questions. First, how can we enhance productivity growth in advanced versus emerging market economies? Second, is there something to learn from observing the big technological waves and their diffusion patterns across different countries? We first present a simple framework to think about the sources of productivity growth. We then look at the sources of productivity growth in advanced countries, and we then turn our attention to the sources of productivity growth in emerging market economies. We finally analyze the technological waves and draw a few lessons from comparing the differences in their diffusion patterns across countries.