Productive Capacities Index

UNCTAD's Productive Capacities Index is a dynamic and practical tool to support developing countries in understanding the status of their productive capacity and how this can be improved.

It builds on UNCTAD's long-standing work on productive capacities, which are essential for generating inclusive and sustained economic growth and achieving sustainable development.

The PCI covers 195 economies for the period 2000-2024. The set of productive capacities and their specific combinations are mapped across 43 indicators. This makes the PCI multidimensional in its analytical abilities.

The PCI can help diagnose the areas where countries may be leading or falling behind, spotlighting where policies are working and where corrective efforts are needed. It suggests a roadmap for future policy actions and interventions under each of its eight categories: human capital, natural capital, energy, ICTs, structural change, transport, institutions and the private sector.

The PCI was developed in response to a resolution by the United Nations Economic and Social Council (ECOSOC), (E/RES/2017/29), encouraging UNCTAD "to pursue its methodological work to measure progress in and identify obstacles to the development of productive capacities in developing countries".

UNCTAD established a Statistical and Technical Advisory Group (STAG) to ensure the index's methodological rigour and integrity with the evolving statistical methods, quality and standards. STAG consists of notable academics in the field, national statisticians, and statisticians and econometricians from UN and non-UN international organisations. The PCI is also supported by a High-Level Advisory Board (HLAB) that guides UNCTAD's Secretary-General on related research and policy matters. The PCI is also subject to peer reviews from other statisticians and academics outside the STAG.

UNCTAD provides regular training to stakeholders in selected countries on the application of the PCI in development policymaking. Countries interested in participating in these training sessions are invited to submit a request.

UNCTAD has long defined productive capacities as "the productive resources, entrepreneurial capabilities and production linkages, which together determine the capacity of a country to produce goods and services and enable it to grow and develop."

• Productive resources are factors of production, including different types of productive resources and capital. They include financial capital and physical capital, the latter comprising both machinery and equipment (typically operating at the firm / farm level) and infrastructure.
• Entrepreneurial capabilities are the skills, knowledge, and information which enterprises have. They comprise entrepreneurship, entrepreneurial capabilities, and technological capabilities. They include the important skills required for investment, production and establishing linkages at the firm / farm level.
• Production linkages are flows among productive units (firms / farms) of goods and services, knowledge, technology and information, and productive resources, including human resources. They include exchanges among productive units of different sizes (micro, small and medium-sized enterprises and large ones), and ownership structures (domestic / foreign, public / private), operating in different sectors.

Developing productive capacities plays a central role in setting in motion the long-term process of structural transformation, which is the backbone of sustainable development. The available evidence shows no nation has developed without fostering productive capacities and structural economic transformation.

Building the economic resilience of developing countries remains a daunting challenge. It depends fundamentally on creating, maintaining and using productive capacities to realize development objectives. This requires a shift from the current fragmented and project-based interventions towards coherent, economy-wide and programme-based approaches to removing binding constraints on development. Actions and interventions at the domestic level need to be supported and complemented by additional robust international support.

The PCI makes an important contribution to these efforts. The index draws on decades of extensive research and policy analysis work, as well as lessons learned from UNCTAD's technical support to the most vulnerable countries in developing key aspects of their trade and productive structures.

The index is the first comprehensive attempt to measure productive capacities in all economies and construct a multidimensional tool that can provide country-specific insights and diagnostics of productive capacity development.