Executive summary

Abstract

Over the past few decades, policy makers in many OECD countries have been grappling with low productivity growth and rising income inequality. At the same time, gaps in business performance in the form of productivity have widened, with a small number of high-performing businesses thriving while others falling further behind. High-performing firms have also been pulling away in terms of sales and profitability, and industry concentration is on the rise in many countries. The COVID‑19 crisis could reinforce these trends, as the digitalisation of business models has accelerated in a way that has favoured large tech-savvy firms. However, while there is growing evidence that widening gaps in business performance contribute to low aggregate productivity growth, little is known about its implications for wage and, ultimately, income inequality.