Productive capacities: gaps between developed and developing nations
The UNCTAD Productive Capacities Index (PCI) for 2024 reveals a persistent and in some dimensions widening gap between the productive capabilities of developed and developing economies. The PCI — which aggregates scores across eight dimensions including ICT, energy, transport, institutions, private sector, human capital, natural capital, and structural change — provides a multidimensional lens on economic development that goes beyond GDP.
High-income OECD economies score an average of 62.3 out of 100 on the PCI, compared to 31.7 for least developed countries (LDCs). The gap is most pronounced in ICT infrastructure, structural change (economic diversification and technological upgrading), and private sector development. Notably, several LDCs have shown marked improvement in energy access scores, reflecting successful renewable energy rollouts.
Sub-Saharan Africa presents a mixed picture. Rwanda, Ghana, and Senegal have shown consistent PCI improvement over the 2015-2024 period, driven by investments in digital infrastructure, institutional reform, and export diversification. These economies demonstrate that rapid PCI gains are achievable even from a low base, with the right policy mix. In contrast, fragile states and conflict-affected economies show deteriorating scores, particularly in institutional quality and human capital dimensions.
The Asia-Pacific region hosts both the fastest-improving and highest-performing developing economies. The Republic of Korea and Singapore rank among the top 10 globally, while economies such as Viet Nam, Bangladesh, and Cambodia have recorded some of the sharpest PCI increases of the 2024 edition, reflecting successful export-led industrialisation strategies. These cases provide important lessons for LDC development planning.
UNCTAD's analysis finds that closing the productive capacities gap between LDCs and middle-income economies by 2030 would require sustained annual PCI improvements of 2.3 percentage points — roughly double the rate currently observed. Accelerating progress demands coordinated action on technology transfer, investment facilitation, skills development, and trade policy coherence. The Aid for Trade agenda, properly implemented, has the potential to significantly accelerate PCI gains in the poorest economies.
Datasets used in this analysis
