There is little doubt that countries within Asia and the Pacific are steadily becoming more competitive, thanks to rapid growth and productivity hikes, large inflows of investment capital, and the region’s emergence as a hub for outsourcing and off-shoring. Yet challenges remain. With levels of productivity in the Asia-Pacific region significantly lower than in other industrialized parts of the world, a critical challenge is to accelerate productivity growth and translate the gains into higher incomes and sustainable job creation.