The labour productivity gap is large
The contribution of capital deepening to labour productivity growth has diminished
Firm-level productivity and efficiency of resource allocation are low
Better resource allocation has contributed to productivity growth
Very unprofitable firms are operating especially in some service sectors
Only the most productive manufacturing firms enjoyed high productivity growth
Latvian firms lag behind in the use of digital technologies
Employment is concentrated in small firms
The productivity gap between large and small firms is wide
Only a small share of SMEs innovate
Informality is particularly high in the non-manufacturing sectors
The number of firms using the microenterprise tax regime remains large
Access to finance remains an obstacle to investment
A significant share of firms are reluctant to apply for bank loans
Borrowing costs are relatively high
The debt recovery rate is low
The insolvency regime could be more efficient
Venture capital investments remain low
Regulatory settings are competition friendly overall
Mark-ups are relatively high in Latvia
Mark-ups are higher in sectors with many SOEs
The shortage of digital skills is severe
Skill mismatches are large
Relatively few firms are managed by professional managers
Participation in adult learning is low
Participation in active labour market policies is low
The quality of academic research can be improved
The research workforce is small
International collaboration in research is limited
There is little collaboration between SMEs and research institutions
Latvia is one of the largest recipients of EU funds