Interest is increasingly being devoted to the evolution of productivity growth in the private sector. To increase their productivity and their competitiveness, firms from the private sector may adopt technologies or new management methods.  However, it can be observed that low-skilled workforce and lack of managerial or/and organizational capacities prevent low-income countries from increasing their productivity. At the same time, we are observing a widening dispersion of productivity levels between firms in the developing world, the left tail of the distribution being thicker in developing countries than in the developed ones. Bloom and his co-authors show a positive correlation between firm management and productivity and document this heterogeneity among firms across countries, across sectors and over time.

Besides the lack of managerial capacity, the difficulty to adopt new work systems to increase productivity lies in the fact that different types of management or organizational methods are driven by practices and procedures defined by existing concepts of organization that are embedded in broader social structures. This means that the diffusion of work systems from one context to another might be hampered by the differences of social structures between them.

Some donors like the Japan International Cooperation Agency (JICA), identified the need to tackle the dearth of managerial capacity in developing countries.  In order to address this, JICA has been dedicating ample resources to the dissemination and implementation of Kaizen, the Japanese management approach, in several countries including Brazil, Central America, Ethiopia, Tunisia and Eastern Europe.

Kaizen presents some specific features that can enhance the positive outcomes of interventions targeting management methods. According to Hosono, Kaizen can also contribute to the creation of learning enterprises, as hosts of knowledge and learning opportunities, that could stimulate inclusive and innovative growth.

However, there is a lack of empirical studies on the effectiveness of these approaches, the determinants of their success (or failure) and the role of policies to support them. This gap in knowledge makes it even more difficult for developing countries to draw lessons that can be used by governments and the private sector to learn from either successful or unsuccessful private and public initiatives. Through this joint research project, GDN and JICA-RI seek to bridge this gap, and to harness new knowledge by focusing on the increase of productivity at the firm level through new managerial methods, such as Kaizen.