Lavisia should adopt policies that increase access to capital, improve skill level and level of technology. Specifically, the country should introduce low interest loans for small and medium businesses. It should make education accessible to all persons, and it should increase investment in research and development. These policies encourage the expansion of firms, the advancement of technology and productivity of the workforce.
The presidency should introduce state-controlled revolving fund that offers capital to small and medium firms at low cost. This policy ensures that local firms can expand and compete with foreign firms in the international market. The expansion of domestic firms creates employment and increases the country’s output. For example, Singapore offers grants to companies as a way of encouraging companies to remodel their business to fit in the country’s economy. The economic policy has enabled Singapore to increase labor productivity (Boston Consulting Group).
The country should make education accessible to all citizens. The accessibility of education increases enrollment in all levels, and this increases the skill level of the country’s labor force. Access to education should also include post-school programs that retain the country’s labor force to fit well in changing the business environment. For example, experienced workers should be retrained to acquire new skills that are useful in the economy. The post-school programs help in decreasing structural unemployment. In various developed countries the private sector works with the government to introduce industrial training programs that retrain workers (Boston Consulting Group).
Finally, Lavisia should invest in research and development to introduce advanced technology that can improve the country’s productivity. It is appropriate for the country to partner with the private sector in implementing research and development project that can transform the country’s economy. Lavisia can borrow the policy from Israel and model it to fit in the country’s system. Advancement of technology has enabled Israel to attract over 10% of global venture capital and achieve a high level of productivity (The Economist).
It is evident that Lavisia can transform its economy by increasing access to low-cost capital, investing in research and development and increasing access to education. These policies improve skill level and encourage entrepreneurs to establish new businesses.
Boston Consulting Group. “How Governments Can Boost Labor Productivity.” Https://Www.bcg.com, 16 Apr. 2018, www.bcg.com/industries/public-sector/how-governments-can-boost-labor-productivity.aspx.
The Economist. “Israel's Economy Is a Study in Contrasts.” The Economist, The Economist Newspaper, 18 May 2017, www.economist.com/special-report/2017/05/18/israels-economy-is-a-study-in-contrasts.