Firm Foundations of Growth: Productivity and Technology in East Asia and Pacific

In an era of rapid global technological change, productivity growth in the East Asia and Pacific (EAP) region has decelerated. The most-productive firms in EAP, the "national frontier," are lagging behind the world's leading firms, the "global frontier," particularly in the digital-intensive sectors driving innovation. This widening gap is critical, as these national frontier firms are pivotal to output, employment, and the dissemination of advanced technologies to other domestic enterprises. Detailed firm-level analysis reveals that barriers to competition are stifling incentives to innovate and are inhibiting the movement of workers and capital to more-productive firms. At the same time, inadequate skills and infrastructure are constraining the region's capacity to innovate. Firm Foundations of Growth: Productivity and Technology in East Asia and Pacific argues that enhancing competition, bolstering digital infrastructure, and developing relevant skills can reignite productivity growth across the region, particularly for frontier firms. This book will be of interest to researchers, businesses, and policy makers dedicated to understanding and addressing the productivity challenges in the EAP region.