The Production Transformation Policy Reviews (PTPRs) are an OECD assessment and guidance tool that provide a comprehensive analysis of the policies for economic transformation. They are elaborated in response to countries’ demands under the auspices of the OECD Policy Dialogue Initiative on Global Value Chains, Production Transformation and Development [the Initiative herein forward].

No unique pathway to development exists. Each country’s experience enriches our understanding of how development unfolds in different contexts and of the role that institutions and policies play in shaping development outcomes.

Colombia is a unitary country with an administrative structure born of the constitutional reform of 1991. It is composed of 32 administrative departments and the Capital District of Bogota. Departments are divided into a total of 1 101 municipalities. Among them, five – Cartagena, Barranquilla, Bogotá, Buenaventura, Santa Marta and Villa de Mompox – are categorised as special districts due to their particular political, commercial, historical, industrial, cultural or environmental characteristics, according to a new regime adopted in 2013, and updated in 2017. Each department has a local government with a governor and assembly directly elected for four-year terms, and each municipality is headed by a mayor and a local council. The 1991 Constitution also accords special status to certain territories: 87 indigenous territories that account for 3.4% of the total population (DANE, 2006[1]).

Colombia, the fourth largest economy in Latin America, is back on stage after decades of conflict. In the last two decades, Colombia has made much progress. Its citizens live better. The GDP per capita doubled between 2000 and 2017, and the economy grew at an annual average of 4.3%, the second highest growth rate in Latin American after Peru and doubling the rate of growth of the region. In the same period, the poverty rate declined from 50% to 28%. However, the incidence of poverty is still higher than in other countries in the region, such as Peru (20%) and Chile (12%). Investors’ confidence grew and the country has taken steps to re-brand itself as a nation open to business and innovation. In 2017, Colombia’s inward stock of Foreign Direct Investment (FDI) reached 57% of GDP, ranking among the highest in the Latin America and Caribbean region and above the OECD average. In addition, firms in Colombia are starting to use digital technologies for business. Thanks to improved digital connectivity and targeted policies for start-up development, Colombia is now the fifth largest hub by number of start-ups in Latin America and the fourth largest by venture capital.

Colombia, the fourth largest economy in Latin America and the third in terms of population, is back on stage after decades of conflict. The country has a growing and relatively stable economy, and is looking to open up new opportunities for all its citizens and territories and to set the basis for more inclusive growth.

Colombia, the fourth largest economy in Latin America, is back on stage after decades of conflict. The country is looking to open up opportunities for all by addressing its structural challenges, benefiting more from trade and investment and increasing productivity. This chapter reviews the structural performance of Colombia in the last two decades and identifies opportunities going forward.

To achieve prosperity Colombia needs to transform its economy and create opportunities for all. This entails a renewed policy approach that prioritises enlarging the knowledge base and increasing the benefits from trade and investment with a view to unlock the potential of all regions in the country. This chapter reviews the policy approach towards industrial development and economic diversification in Colombia, in comparison with other countries, and it identifies the key policy reforms needed to speed up economic transformation in the country.

Colombia needs to speed up digitalisation to transform its firms and industries. The country has advanced in digital connectivity. It has taken steps to update its training in digital skills and has a buoyant start-up scene. Now it needs to complement the current focus on technology adoption by identifying potential areas in which it can be an innovator and creator of knowledge-based solutions. This chapter reviews the progress Colombia has made in its digital transformation. It focuses on start-ups and existing firms, and concludes with a call to integrate the digital dimension in future policies for production development.