New technologies often require new structures and a reorganisation of production to maximise efficiency gains. While managerial quality is hard to quantify, the existing studies find a statistically strong correlation between a firm’s managerial quality and its total factor productivity.
9 One of the channels through which managerial practices enhance firm performance has been found to be the increased capability of firms to absorb new technologies.10 Certainly there is potential to improve education systems in the euro area and thereby to give greater numbers of graduates the necessary technical and scientific skills.