"Innovations gap" as a concept both for the economy and for understanding adoption of or not adopting best practice
Simon Wren-Lewis is an economist at Oxford and among his activities, he writes the blog Mainly Macro. A current entry,"The Output Gap is no longer a sufficient statistic for inflationary pressure," discusses what he calls the "innovations gap."
what I call the innovations gap: the difference between actual output and the level of output that firms could achieve if they started using the best technology available to them. Because there is currently a large innovations gap, firms are likely to meet additional demand not be raising prices but by investing in these more efficient techniques. ...It's a great term, very succinct, which usefully describes the difference between adopting best or leading practice, adopting better than what you're doing but still laggard practice, or changing nothing, when it comes to government operations.
Why have most firms not been investing in the most productive equipment and techniques since the GFC [Global Financial Crisis]? I think the simple answer is fixed costs and demand. Investment projects almost always involve a large fixed cost element (disruption, retraining), and with static demand those fixed costs may exceed any efficiency gain. But in a normal recovery from a recession, where demand is growing rapidly, firms are happy to incur that fixed cost because they need to expand capacity anyway to meet growing demand. In a weak recovery, on the other hand, many firms may not need to expand capacity, with any modest increases in demand going to leading firms, firms that do invest in the latest technology. Hence the divergence noted above.
It's the flip side of what Alexander Gerschenkron called "the economic advantages of backwardness," which Wren-Lewis calls the "fixed costs" of current operations--the investments in the technology and practice you have versus the cost to adopt new practices and technology and the retraining that is required.