According to OECD research, Greece has the highest share of capital (and labour) trapped in non-viable companies among OECD countries (27%). This suggests that there is a high degree of capital misallocation in the economy, which contributes to lower productivity. 6. Promoting innovation, education and knowledge-based capital. A necessary condition for sustainable growth is the achievement of higher TFP growth.
In order to foster TFP growth, policy must focus on improving the quality of labour (i.e. skills), attracting investment in new technologies and improving the quality of capital through the creation of an institutional framework that supports innovation.