Emerging economies are experiencing a prolonged productivity slowdown

HOW DO MODERN innovations stack up with those of the past? Some economists, such as Robert Gordon of Northwestern University, argue that driverless cars, 3D printers and so on pale into insignificance compared with the fruits of previous industrial revolutions, such as mass production (see Free exchange). That, they think, explains a prolonged productivity slowdown in America and other rich economies that the financial crisis deepened.

But what about everywhere else? Developing countries are, by definition, some distance from the technological frontier. One consolation of their position is the vast backlog of past innovations that remain for them to exploit more fully. Their growth depends more on imitation than innovation. A country where most people still ride scooters does not have to worry if the next Tesla fails to arrive on schedule.

And yet they too have suffered a productivity let-down. According to a new World Bank report, the slowdown is the “steepest...



via The Economist: Finance and economics Business Feeds

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