Can Fast-Growing Unicorns Revive Productivity and Economic Performance?

The productivity drought and the unending search for GDP growth by high- and middle-income countries has drawn attention to the flagging vigor of large incumbent corporations and the need to groom a crop of unicorns. Highly valued, entrepreneurial, superstar firms can potentially dial up competition, innovation, and productivity. For a country like Korea that has folded the "breeding" of unicorns into its growth strategy, success would restore economic momentum, diversify exports, strengthen the services sector, and challenge the dominance of conglomerates. This note explains why unicorns deserve the attention of policymakers, how Korea—one of the OECD’s most dynamic economies—is pursuing its firm-level objectives, and the takeaways for other economies. Thus far the outcomes are mixed. Achieving the desired goal may require an elaboration of existing efforts, enlarging the stock of unicorns, and more time.    

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