chapter  7
20 Pages

Patterns of Productivity Enhancement in Small and Medium Enterprises: “Higher-Order” Upgrading

ByNichola Lowe

As discussed in the previous chapter, a key challenge for job-creating growth in Paraguay is an adequate rate of technological advance in the small and medium enterprise sector so that overall factor productivity rises significantly over time. This chapter draws on interviews with the owners and/or general managers of approximately 25 small and medium enterprises that have responded to new economic challenges by embracing strategies for higher-order technological upgrading, i.e., upgrading in ways that involve progressive labor policies. 1 The experiences of these enterprises provide insights into mechanisms that can hopefully be generalized to a wider range of Paraguayan firms.