Productivity, structural change and diversification of production in Latin America

Development involves economic, social and political changes. Within this process, productivity and change in the production structure are closely related to other areas of the economy and society. For technology and income per capita to converge, countries must move towards more diversified, more complex production structures with more technology and knowledge so they can make progress in improving their productivity and reducing their structural heterogeneity. Endogenous capacity-building and reducing economic and social gaps go hand in hand and require the appropriate public policies. Industrial, technological and capacity-building policies are therefore necessary to achieve these objectives. Consequently in Latin American countries, production diversification policies and industrial and innovation policies should play a central role in the new development strategy. The development agenda must prioritise long-term policies geared towards more knowledge-intensive and innovation-intensive production structures in which social and environmental sustainability are priority objectives.