The Productive Capacities Index: Background, conceptual framework and methods

In response to a resolution by the United Nations Economic and Social Council (ECOSOC), the Productive Capacities Index (PCI) was developed by UNCTAD as a multidimensional statistical tool to measure, monitor, and benchmark productive capacities through a comprehensive framework, encompassing human capital, natural capital, energy, transport, ICT, institutions, private sector, and structural change. This paper outlines the conceptual foundation of the PCI, the methodological approach used for indicator selection and data transformation, and the statistical processes, particularly Principal Component Analysis, used to derive the composite index. Emphasis is placed on how the PCI supports evidence-based policymaking, facilitates cross-country comparisons, and contributes to statistical development agendas aligned with the 2030 Agenda for Sustainable Development. The PCI serves as a valuable complement to traditional indicators such as GDP, offering insights into the underlying capabilities necessary for economic and social development.