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The Role of Cities in Productive Transformation

Productive transformation policies have gained renewed prominence in recent years. In both developed and developing countries, governments and private sector actors have begun planning and implementing programmes and instruments for private sector development; cluster promotion and value chain; as well as supply chain approaches linked to infrastructure provision, innovation and equity.

Many triggers have led to this revival:

(a) the economic crisis of 2008 demonstrated to governments the importance of regulation and policies to addressing market failures;

(b) the significant rise of intermediate cities and the dynamism of large cities, who are pushing for locally promoted policies with more autonomy and leverage; and

(c) productive policies are increasingly seen as a tool to generate jobs, to support micro and small-sized business, and create wealth. For the purposes of this report, Productive Transformation Policies (PTP) are defined as public programs and instruments designed to create jobs and achieve sustainable growth through higher productivity and promotion of competitive sectors.