Chile’s productivity has virtually stagnated over the past decade, thus impairing the convergence towards higher living standards. Key policy measures to boost productivity growth include: enhancing competition through legal and regulatory action; removing regulatory barriers to entrepreneurship; and strengthening innovation in firms. Specifically: • Ensure the National Economic Prosecutor receives sufficient resources. Deter cartel participation by linking the maximum fine to revenues on the market involved in the conspiracy. Make price fixing a criminal offence. • Revise the text of the Competition Act to clarify the Competition Tribunal’s jurisdiction to review mergers, the stages of merger analysis and the substantive standards applied. • Reduce entry barriers in retail and business services to discipline incumbent firms. • Continue reducing “red tape” for start-ups to strengthen competition and encourage entrepreneurial ideas. • Reform the bankruptcy law to encourage entrepreneurial risk taking in non-traditional sectors. • Maintain strong commitment to support technological and other forms of innovation and continue efforts to strengthen links between universities and firms. • Complement supply-side measures to foster broadband Internet access by demand-side measures. • Pursue the cluster initiative as a market-friendly, bottom-up approach to give innovation policy the necessary degree of selectivity, but strengthen the evaluation of relevant measures and establish sunset clauses for public support. • Establish by law the institutional structure for innovation policy to ensure continuity of the long-term innovation strategy.