Weak productivity growth raises concerns for future living standards. Low productivity reflects educational outcomes that are poorly matched to the labour market, and insufficient geographical mobility of low-skilled workers that has created pockets of unemployment in poorer regions while prosperous regions continue facing labour shortages. Moreover, there is a large productivity gap between foreign-owned firms and less productive domestic-owned firms. To improve productivity and ensure a speedy post COVID-19 recovery, education and training policies need to ensure that all workers are equipped with the skills demanded in the labour market. Better functioning housing and transport infrastructures are key to promote labour mobility. Importantly, domestic firms must move up the value chain. To this end, better roads, digital infrastructure and digital adoption would help facilitate integration into regional and national value chains. A more pro-competitive business environment would allow more productive firms to grow and invest in new technologies. This entails a more efficient implementation of existing competition regulation, the withdrawal of distortive government support to less productive incumbents, and streamlining the insolvency regime to accelerate market exit. A stronger digital public administration could support this process.