They have allowed Peru to exploit its comparative advantages in natural resource-based sectors and traditional industries and reap the benefits of increased demand from both developed and emerging economies. They have also begun to have positive, albeit moderate, effects on living standards and poverty reduction. Its economy remains relatively undiversified. Income disparities are high and informal jobs still account for a large share of total employment. Although labour productivity has increased since 2003, it still lags behind other Latin American middle-income countries. Growth in total factor productivity (TFP), which reflects more efficient use of factor inputs, including through innovation, has played only a marginal role.