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Understanding a country’s economic potential is crucial to formulating effective policies, sustaining growth, and improving lives. Traditional metrics like Gross Domestic Product (GDP) offer a limited snapshot, focusing primarily on output without fully capturing the capacity to produce goods and services sustainably or inclusively. Recognizing this gap, the United Nations Conference on Trade and Development (UNCTAD) introduced the Productive Capacities Index (PCI) on June 20. This new tool provides a multidimensional approach, measuring economic potential by assessing a country’s capabilities to produce goods, deliver services, and foster growth.

What is the Productive Capacities Index (PCI)?

The PCI is designed as a robust, composite measure that evaluates a country’s economic resources, entrepreneurial capabilities, and production linkages. Unlike GDP, which emphasizes output, the PCI centers on potential, focusing on the capacity of an economy to sustain long-term growth, reduce poverty, create jobs, and adapt to global production and trade networks.

UNCTAD Secretary-General Rebeca Grynspan has emphasized the importance of productive capacities for sustainable development, stating that “No nation has ever developed without building the required productive capacities.” In essence, productive capacities are the building blocks that enable countries to achieve lasting economic growth, diversification, and social progress.

A Practical Tool for Policymakers

The PCI is not just a measurement tool; it is a strategic resource for policymakers. Available through an online portal, the PCI offers data on 194 economies, publications, manuals, and tools that can guide governments in their policy development. This resource allows countries to assess their economic performance, track progress, and design strategies that address development gaps, supporting UN Secretary-General António Guterres’ call to “move beyond GDP.”

For instance, a country with a low PCI score might need to focus on improving infrastructure, enhancing workforce skills, or fostering a more innovative business environment. By tracking improvements in productive capacities, policymakers can better understand which areas need support and adjust their strategies accordingly. This proactive approach allows for data-driven policymaking that aligns closely with the real needs of a country’s economy and its people.

How Does PCI Compare Across Regions?

According to UNCTAD’s recent data, developed economies like Denmark, Australia, and the United States top the PCI rankings, scoring an average of 70 out of 100. These high scores reflect strong productive capacities, with robust infrastructure, advanced technological capabilities, and dynamic entrepreneurial ecosystems that fuel sustainable economic growth.

In contrast, developing regions display more varied results. Asian and Latin American countries generally perform better than African nations. Countries such as China, Chile, and Qatar are closing in on developed economies, with average PCI scores around 61. On the other end of the spectrum, African countries like Chad, Malawi, and Niger register scores below 20, underscoring significant developmental gaps.

Progress and Setbacks

Several countries demonstrate remarkable progress on the PCI from 2018 to 2022. Rwanda, Senegal, and Togo in Africa showed improvements, while in Latin America and the Caribbean, Barbados, the Dominican Republic, and Panama achieved notable gains. In Asia, countries like Bangladesh, Saudi Arabia, and Timor-Leste made strides in developing their productive capacities. However, these improvements have not substantially changed their global rankings, suggesting that continuous, long-term efforts are required to reach developed economy levels.

Not all countries experienced growth on the PCI. Some, such as Brunei Darussalam, Guatemala, Kyrgyzstan, Lebanon, Namibia, Suriname, and Uganda, saw declines in their scores, highlighting challenges like political instability, economic shocks, or policy setbacks that can erode productive capacities.

Why PCI Matters: Moving Beyond GDP

The PCI reflects a growing consensus among economists that GDP alone is insufficient for measuring economic health. While GDP quantifies output, it does not account for resilience, inclusivity, or sustainability—factors increasingly recognized as critical in today’s interconnected global economy. The PCI offers a more nuanced view, evaluating inputs such as resource availability, workforce skills, infrastructure, and innovation potential that collectively shape a nation’s development trajectory.

Countries with high PCI scores possess the foundational elements needed for economic resilience and adaptability. This is especially crucial in today’s world, where factors like climate change, digital transformation, and shifting global supply chains demand economies that can innovate, diversify, and sustain long-term growth. By focusing on capacities rather than output, the PCI aligns with a vision of economic development that values human potential, environmental stewardship, and social equity.


The Productive Capacities Index (PCI) represents a pivotal step toward a more comprehensive understanding of economic potential. As economies strive for sustainable and inclusive growth, tools like the PCI can guide them in building the capacities that matter most for their citizens and global competitiveness. By enabling countries to assess and enhance their productive capacities, the PCI empowers policymakers to implement targeted strategies that support long-term economic prosperity and human well-being.

As UNCTAD’s Secretary-General Rebeca Grynspan aptly noted, building productive capacities is fundamental to a nation’s development. For governments, the PCI is a powerful tool for identifying strengths, addressing weaknesses, and ultimately creating an economy that serves the needs of its people while remaining resilient in the face of global challenges.

References

United Nations Conference on Trade and Development (UNCTAD). (2023). Productive Capacities Index (PCI). Retrieved from https://unctad.org

Grynspan, R. (2023). “Productive capacities: Key to achieving sustained economic growth and development.” UNCTAD Report on Economic Development. UNCTAD, Geneva.

Guterres, A. (2022). Beyond GDP: The Need for New Development Metrics. UN Policy Brief Series. United Nations, New York.

UNCTAD. (2022). “Measuring what matters: How the Productive Capacities Index supports development beyond GDP.” Policy Brief. UNCTAD, Geneva.

UNCTAD. (2023). Productive Capacities Index: Methodology and Framework. UNCTAD Publications, Geneva.

United Nations. (2021). “Secretary-General’s Call to Move Beyond GDP and Focus on Sustainable Development Goals.” UN News. Retrieved from https://news.un.org

World Economic Forum. (2023). “Measuring Economic Potential in the 21st Century.” Global Competitiveness Report. WEF Publications.

International Monetary Fund (IMF). (2022). Beyond GDP: Alternative Measures of Economic Well-being. IMF Policy Paper Series.

Organisation for Economic Co-operation and Development (OECD). (2021). “Productive Capacities and Economic Growth: Measuring Multidimensional Development.” OECD Economic Outlook.

UNCTAD. (2022). UNCTAD’s Productive Capacities Index (PCI) Portal. Retrieved from https://pci.unctad.org