The region's productivity gap is also a management gap
Labour productivity in Latin America and the Caribbean has barely grown since 2019. Comparative surveys show that the region's medium and large manufacturers were less well managed than their US peers, and experiments indicate that fixing basic practices has measurable effects.
Executive summary
According to ECLAC, available information indicates that the region's meagre recent productivity gains came almost entirely from improvements within each sector, with no contribution from structural change. Inside companies, management quality is one of the best-measured variables.
In the World Management Survey, which scored the management practices of thousands of manufacturers with 100 to 5,000 employees from 1 to 5 between 2004 and 2010, the United States averages 3.35; Mexico, 2.92; Chile, 2.83; Argentina, 2.76; and Brazil, 2.71.
The gap comes from the tail of poorly managed firms. In Brazil, Argentina and Chile, about two in three firms score below 2.94, the level that marks off the worst-managed quarter of US firms.
In the Andean region, multinationals score higher than domestic firms in all four countries measured by the IDB. And an experiment with large Indian textile firms showed that adopting basic practices raised productivity from the first year.
Context
The productivity debate in the region usually centres on infrastructure, credit and informality. All of them matter, but they leave out a variable each company controls: how it sets targets, measures performance and manages its people.
That variable has been measured with methods comparable across countries for about two decades. The results show that the region has well-managed firms alongside a high share of firms with weak practices.
Figure 1 · Firms with a management score below 2.94
% of manufacturing firmsTable 1 · Management scores of domestic firms and multinationals in the Andean region
| Country | Domestic | Multinationals | Difference |
|---|---|---|---|
| Ecuador | 2.82 | 3.25 | 0.43 |
| Colombia | 2.54 | 2.93 | 0.39 |
| Peru | 2.69 | 3.01 | 0.32 |
| Bolivia | 2.49 | 2.81 | 0.32 |
Business implications
Measure management practices before investing in technology. In the study by Bloom, Sadun and Van Reenen, doubling IT capital is associated with only 1.2% more productivity at other firms, and management practices account for most of the US multinationals' advantage.
Start with performance monitoring. It is the first of the three areas the survey assesses. It means indicators reviewed at a fixed frequency, defined owners and action when results drift.
Benchmark against the best firms in the same country. In the Andean region, multinationals outperform domestic firms in every country measured. Their practices can be observed through suppliers, customers and staff, and serve as a realistic model.
Methodology & data
Productivity from ECLAC's Economic Survey 2026 and the Latin American Economic Outlook 2025 by the OECD and partners. Management practices from the World Management Survey, CAF and the IDB; effects from Bloom, Sadun and Van Reenen (2012) and Bloom and others (2013). Differences in the table are own calculations.
Venezuela is not covered by the World Management Survey; regional figures serve as a reference.
References
ECLAC (2026). Economic Survey of Latin America and the Caribbean, 2026. · OECD et al. (2026). Latin American Economic Outlook 2025: boosting and financing productive transformation. · Bloom, N., Genakos, C., Sadun, R. and Van Reenen, J. (2012). Management Practices Across Firms and Countries. Academy of Management Perspectives, 26(1). · Bloom, N., Sadun, R. and Van Reenen, J. (2012). Americans Do IT Better: US Multinationals and the Productivity Miracle. American Economic Review, 102(1). · Bloom, N., Eifert, B., Mahajan, A., McKenzie, D. and Roberts, J. (2013). Does Management Matter? Evidence from India. Quarterly Journal of Economics, 128(1). · CAF (2013). Reporte de Economía y Desarrollo 2013. · IDB (2020). Prácticas gerenciales en la región andina (IDB-DP-00801).