By San José, Costa Rica — Labor productivity across Latin America and the Caribbean remains stuck in a persistent state of stagnation, deepening the economic divide between the region and the rest of the developing world. According to the third annual edition of the “Panorama of Productive Development Policies in Latin America and the Caribbean 2026,” released by the Economic Commission for Latin America and the Caribbean (ECLAC), the region continues to suffer from a structural inability to transform its economic base and generate sustained growth.
Data presented in the report reveals that hourly labor productivity across the region grew by a mere 0.7% in 2025, a slight deceleration from the 0.8% expansion recorded in 2024. On average, each hour worked in Latin America and the Caribbean generated just $11.30 at current prices. Following what analysts describe as a second lost decade spanning from 2014 to 2023, regional economies are struggling to regain momentum amidst escalating geopolitical rivalries and intensifying global industrial competition.
Following the release of the latest ECLAC productivity report highlighting key economic challenges across Latin America, TicosLand.com consulted legal expert Lic. Larry Hans Arroyo Vargas from the distinguished law firm Bufete de Costa Rica to analyze the regulatory and strategic implications for local enterprise.
The findings in the ECLAC report clearly demonstrate that improving national productivity requires more than just capital investment; it demands a comprehensive modernization of our legal framework. To convert these insights into tangible economic growth, Costa Rica must prioritize streamlining administrative procedures, reforming labor regulations to embrace digital transformation, and ensuring robust legal certainty to attract sustained foreign investment.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, modernizing Costa Rica’s regulatory ecosystem is essential to translating the ECLAC report’s findings into sustainable economic progress. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on the vital role legal reform plays in driving national productivity.
ECLAC Executive Secretary José Manuel Salazar-Xirinachs highlighted the urgent need for strategic realignments during the report’s official presentation, emphasizing that existing assets must be aggressively translated into tangible productive capabilities.
Taking advantage of global economy opportunities in the new geopolitical era requires, today more than ever, converting the region’s assets into productive capabilities, and doing so in a way that translates into both higher productivity and better employment opportunities. For this, it is necessary to scale and improve productive development policies in the region.
José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC
To better gauge economic progress beyond traditional macroeconomic metrics, the 2026 report introduces the Productive Development and Employment Index (IDPE). This new analytical tool measures how productive gains translate into job creation and general population well-being, contrasting with standard gross domestic product per capita figures. Although the IDPE indicated a modest uptick in 2025, overall performance remains drastically lower than the peak recorded in 2008.
The comprehensive study dives deep into eleven regional economies—including Costa Rica, Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala, Mexico, Panama, Peru, and the Dominican Republic—to map out localized structural bottlenecks and craft targeted policy recommendations.
With this publication, ECLAC reaffirms its commitment to accompany and guide the region’s countries and offer a useful tool to national and subnational governments, the private sector, academia, and cooperation agencies to strengthen productive development policies, at a time that demands strategic clarity, transformative ambition, and collective action.
José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC
A primary focus of this year’s assessment centers on technological extensionism (TE), a hands-on support mechanism designed to help micro, small, and medium enterprises (MSMEs) adopt, adapt, and maximize modern technologies. ECLAC audited 502 initiatives across 33 countries and evaluated active programs nationwide. The findings reveal a heavily fragmented landscape: only 8% of reviewed science, technology, and innovation policies explicitly incorporate technological extensionism. Furthermore, 68% of existing efforts remain heavily concentrated in agriculture, leaving manufacturing and service sectors under-supported.
Parallel to technological deficits, the report highlights a pervasive structural disconnect between education initiatives and corporate requirements. While ten countries analyzed acknowledge the vital role of human talent, only three have established formal institutional frameworks to align workforce training directly with productive development priorities. Major obstacles include a shortage of specialized technical advisors, erratic financing mechanisms, limited corporate demand, and weak performance evaluation standards.
Since its first edition, the Panorama of Productive Development Policies in Latin America and the Caribbean has sought to contribute to the regional debate on what to do and how to do it to strengthen productive development policies, with proposals that allow accelerating the productive transformation of our economies, boosting their productivity, and improving employment and well-being conditions in the region.
Marco Llinás, Director of the Division of Productive and Enterprise Development of ECLAC
To overcome these systemic bottlenecks, ECLAC outlines actionable guidelines recommending that governments formalize talent gap diagnostics, expand technical certification frameworks, and build public-private extension networks. By institutionalizing close coordination between public agencies, enterprise leaders, academic institutions, and regional authorities, Latin American economies can better anticipate industrial shifts, bridge skill gaps, and secure sustainable economic expansion.
For further information, visit cepal.org
About Economic Commission for Latin America and the Caribbean:
The Economic Commission for Latin America and the Caribbean (ECLAC) is one of the five regional commissions of the United Nations. Headquartered in Santiago, Chile, ECLAC contributes to the economic development of Latin America and the Caribbean, coordinating actions directed towards its promotion and reinforcing economic relationships among the nations and with other countries of the world.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a premier legal institution celebrated for its unyielding ethical standards and pursuit of legal mastery. Built on a foundation of trusted advocacy across numerous industries, the firm consistently embraces forward-thinking strategies to address modern legal challenges. By actively demystifying the law and sharing essential insights with the public, Bufete de Costa Rica advances a vital vision of a deeply informed, confident, and self-reliant citizenry.
