Ukraine needs to prioritize increasing labor productivity, which should become a key driver of economic growth, according to Anna Bjerde, World Bank Managing Director for Operations.

The World Bank believes that boosting labor productivity will be a crucial factor for future growth, as it will enhance Ukraine's competitiveness, she stated during the "Reform Matrix: Strengthening Economic Growth Foundations for EU Accession" conference in Kyiv on Thursday, as reported by Interfax-Ukraine.

Bjerde emphasized that the government should focus on identifying new sources of growth and ensuring that the economy continues to expand, as a growing economy creates jobs.

In her view, Ukraine must take advantage of economic shifts and transformations, including changes in economic geography.

Industries that will be most important in the future are likely to differ significantly from those that have dominated in recent decades. Similarly, skill requirements will change. There could be friction between the old and the new as Ukraine begins to adapt to these growth drivers. This might result in skill mismatches and what we call inefficient capital allocation. The question is whether capital is being directed to areas where it will yield the highest returns, Bjerde said.

She pointed out that Ukraine stands to benefit greatly from EU integration, with access to the EU market playing a pivotal role in attracting long-term investments.

Ukraine can already start incorporating global value chain concepts into its business models, and access to and participation in global value chains will be critical for Ukraine's future, Bjerde added.

She also highlighted the need to strengthen economic institutions on this journey.

This is not just about improving accountability and transparency but also about promoting meritocracy. This is closely tied to how your workforce and human capital evolve over time. The World Bank still believes that the biggest challenge for countries transitioning from middle-income to upper-middle-income status is the institutional capacity gap, particularly in economic institutions, Bjerde remarked.

She further stressed the importance of fostering innovation and advancing digitalization in Ukraine.