Foundations for Growth and Competitiveness 2026

Chile

Chile’s GDP per capita convergence with the top half of OECD countries has stalled in the last decade. Labour utilisation remains subdued, with the employment and participation rates about 10 percentage points below the average of top-performing OECD countries, and the unemployment rate around 5 points higher. Productivity and capital per worker remain well below the OECD averages but have followed a gradual upward trend. Addressing these gaps in productivity, capital intensity and labour utilisation will be important to support income convergence.

Key policy challenges include strengthening digital infrastructure and innovation capacity, improving education outcomes and adult skills, and effectively implementing the recent reform on regulations and permits to reduce administrative barriers. Facilitating the expansion of electricity transmission lines and fast-tracking permitting for climate-resilient infrastructure projects will also be important to raise economic growth in a sustainable way.

Economic performance

Gaps to the average of the upper half of the OECD countries

Source: Panels A and D: OECD, Economic Outlook database; Panel B: OECD, Labour Force Statistics database; Panel C: OECD, Economic Outlook and Productivity databases.

Selected policy gaps

Source: OECD calculations based on the Foundations for Growth and Competitiveness database.

Digital infrastructure: Accelerate network rollout and boost digital adoption

Despite some progress in expanding digital infrastructure and modernising the telecom licensing regime, Chile continues to lag OECD peers in digital development, particularly broadband penetration, and digital uptake among small firms. Gaps in digital skills constrain the adoption and diffusion of technologies across firms.

Recommendations

✓ Fully implement a single, technology-neutral licensing regime, and fast-track municipal permits using the new one-stop system to accelerate 5G and nationwide fibre rollout and lower prices.

✓ Expand the online training catalogue to include higher-level ICT courses and link vocational curricula to industry needs through co-funded upskilling vouchers for SME employees.

Innovation: Foster investment in R&D

Innovation remains limited, particularly among small and medium-sized enterprises. Business R&D spending is low, at just 0.3% of GDP, and only 17% of firms reported introducing technological innovations – less than half the OECD average. R&D public support programmes are fragmented, with overlapping objectives and limited accountability across agencies, with limited evidence of their effectiveness in promoting business innovation. Technology diffusion is also weak, partly due to limited collaboration between firms and research institutions.

Recommendations

✓ Simplify public R&D support, building on coordination efforts between ANID and Corfo, merge overlapping grant schemes into one streamlined programme, and raise the refundable R&D tax credit for business research.

✓ Strengthen impact evaluation of government R&D grants.

✓ Strengthen business–university links, foster university-affiliated technology incubators and joint R&D projects to boost knowledge transfer and scale SME innovation.

Education: Build stronger skills for the digital and green transition

Student learning outcomes and skill formation remain below OECD standards. Measures of student performance lag OECD average. Problem-solving proficiency among adults in technology-rich environments is low compared to the OECD average (11.7% vs 32%), and access to structured training remains especially limited for low-income workers. Upper-secondary vocational tracks and tertiary attainment both lag OECD peers and offer weak links to labour-market needs.

Recommendations

✓ Strengthen foundational skills in schools. Fund nationwide teacher-training to raise foundational and digital competences from an early age.

✓ Modernise vocational and tertiary pathways. Align vocational and university curricula with industry needs in ICT and green-transition skills, expand work-based learning, and intensify career guidance so qualifications translate into better labour-market outcomes.

✓ Scale up flexible lifelong learning and reskilling by integrating programmes such as Talento Digital and Reinvéntate into a national adult-learning platform offering modular online courses and individual training vouchers aligned with labour-market demand.

Governance and regulations: Implement the business permit reform and strengthen insolvency procedures

Chile has historically faced regulatory and institutional hurdles affecting investment and productivity. The recently approved reform to the business permit system simplifies sectoral authorisations, introducing a digital one-stop shop with real-time tracking and silence-is-consent mechanisms to expedite approvals. Given the extent of the reform, full implementation can take time as agencies will need to adapt quickly to new fixed deadlines, digital platforms, silence-is-consent practices, and coordinated inter-agency processes. Chile’s insolvency framework provides fewer restructuring tools than OECD peers, potentially slowing reallocation and hindering investment.

Recommendations

✓ Ensure an effective and timely implementation of the business permit reform while strengthening public communication about the new rules, particularly the implications of the “silence is consent” provision.

✓ Fully operationalise the one-stop shop, ensure inter-agency coordination, publish performance metrics, and run periodic reviews to drive continuous modernisation.

✓ Upgrade the insolvency framework by allowing creditor-initiated restructuring and introduce simplified, out-of-courts low-cost procedures for viable SMEs to speed reorganisation and exit.

Energy and natural capital: Expand climate-resilient infrastructure

Chile aims to reach 80% of electricity from renewable sources by 2030. However, a lack of transmission lines from renewable generation zones to demand zones curtails energy and creates nodal pricing disparities in the electricity market, weakening competitiveness and reducing the efficiency of the system’s operations. Planning for climate-resilient infrastructure is fragmented and under-funded, leaving transport and water networks vulnerable to extreme hydrometeorological events. These gaps constrain productivity and deter investment. Clearer project pipelines and streamlined regulation would crowd in private capital, enhance infrastructure quality and strengthen the foundation for sustained economic growth.

Recommendations

✓ Facilitate the expansion of electricity transmission lines to integrate renewables into the electric grid.

✓ Ensure the development of resilient-infrastructure projects, fast-track their permitting and appraisal, and publish a unified pipeline of priority investments to attract long-term private capital.

✓ Embed mandatory climate-risk screening and minimum resilience standards in all public-investment and PPP guidelines to safeguard critical transport and water networks.

Recent progress on structural reforms

Chile has implemented a range of growth-oriented structural reforms over the past few years. Recent initiatives include the FinTech law in 2022, aimed at improving financial inclusion and innovation. In telecommunications, licensing has been modernised towards a single, technology-neutral regime. In July 2025, a comprehensive reform to the business permit system was enacted to simplify and accelerate sectoral authorisations, including a digital one-stop shop and stronger inter-agency coordination. A major pension reform was approved in early 2025 combining individual savings with a solidarity pillar and a phased increase in employer contributions, with the goal of improving replacement rates and equity while deepening domestic capital markets. Rules on public procurement and integrity have also been strengthened.