Lowering the barriers that prevent enterprises from exiting the market will likewise foster growth. It would facilitate what Joseph Schumpeter called "creative destruction". OECD research suggests that policy-induced exit barriers matter for productivity growth, because fewer exits lead to less scope for productivity spillovers and to the misallocation of labour, capital and skills.
It concludes, for instance, that insolvency regimes should be streamlined.11This is also important when it comes to financial market integration and private risk sharing. And investing more in skills and education promises to deliver rich rewards, too. This would not only boost labour productivity, but also make workers less at risk of losing their jobs.