The overarching objectives of the project are four-fold:
1. Establishing a “comprehensive” network of researchers in Europe and beyond.
The DynEmp and MultiProd networks have considerably expanded to cover several countries in EU (with a larger coverage of Eastern and Baltic countries, in particular) and outside of it (with an increasing coverage of Latin America, South-Eastern Asia and, more recently, North Africa). Besides increasing their size, the networks have also strengthened significantly: collaborations between the Division and the partners of the networks have intensified. In addition, an increasing number of countries are now providing firm-level data to the DynEmp and MultiProd, with substantial improvements in the quality the data.
During the COVID-19, the DynEmp project has expanded: a new publicly available database that collects monthly information on firm entry, exit and bankruptcies has been developed.
2. Providing new evidence on productivity patterns and trends in EU member countries and beyond
The analyses performed on the DynEmp and MultiProd data have allowed to uncover novel important patterns in productivity divergence and in business dynamics, to trace back the determinants of these patterns, and to identify the key policy levers to act on them.
Results include the identification of the key role of less productive (“laggard”) firms in explaining productivity divergence and the slowdown in productivity growth; the uncovering of the slowdown in catch-up to the productive frontier and the assessment of its determinants. The work of the Division has allowed to uncover novel facts on long-term trends in business dynamics, by assessing cross-country similarities, and identifying its structural and policy determinants with a comprehensive and credible strategy.
These contributions have been accompanied by other exploiting other data sources, which have complemented the afore-mentioned results with facts on mark-ups and industry concentration, wages and skills. The result is a sharp narrative that links the ongoing digital transformation to long-term productivity growth and inclusiveness.
3. Better understanding the links between innovation, diffusion and productivity and the role of policy settings
The analysis has highlighted how the digital technologies and the intangible assets that are key complements to them have peculiar characteristics that may generate winner-takes-most dynamics. These winner-takes-most dynamics reduce the pace of technological diffusion towards less productive firms and the scope for the entry of new firms, dampening productivity growth and business dynamics. The increasing productivity divide reduces the competitive pressures on the most productive firms.
These patterns have important implications beyond productivity growth, encompassing competition, inequality, and inclusiveness.
4. Fostering knowledge sharing on productivity trends, determinants, and implications for social inclusion.
The contributions from the MapProdIGI project have been widely quoted in policy debates and in high quality media outlets. Work from the MapProdIGI project has been been presented in numerous invited sessions and seminars across the globe.
The OECD series Insights on Productivity and Business Dynamics has further developed, with 17 additional country-notes.
During the second half of 2020, the European Commission and the OECD organised a set of “Innovation and growth webinars”, as well as a final international online conference, jointly organised with the European Commission, on “fuelling productivity and business dynamics after COVID-19”.
