This briefing has distilled several decades of economic growth theory into a clear message for policymakers: there is no “one-size-fits-all” policy for promoting long-term growth. The insights from modern, innovation-based growth models demonstrate that the optimal policy mix is dynamic and contingent on a country’s stage of development, as measured by its distance to the global technology frontier. To achieve sustainable growth, policy must evolve with the economy it seeks to guide.

The following framework outlines a dynamic approach to growth policy:

• For Economies in Early-Stage Development (Far from the Frontier):
  • The primary goal is to accelerate imitation and adoption of existing global technologies.
  • Policy Priorities: Prioritize broad access to high-quality primary and secondary education to build workforce absorptive capacity. Foster institutions that support capital investment in existing firms. Competition policy should encourage efficiency without excessively discouraging incumbents from making large-scale investments.
• For Economies in Advanced-Stage Development (Near the Frontier):
  • The focus must shift to fostering frontier innovation.
  • Policy Priorities: Increase public and private investment in higher education and research. Enact institutional reforms that lower barriers to entry, promote labor market flexibility, and protect intellectual property rights. Implement a sophisticated competition policy that stimulates “escape-competition” innovation among technologically advanced firms.

Ultimately, sustainable prosperity is not the result of a fixed policy blueprint, but of a dynamic strategic capability—the ability to continuously adapt policy to an economy’s evolving position relative to the global frontier.