Select the most appropriate option that can substitute the highlighted words in the following sentence.
Employers in many developing countries report that a lack of skilled workers is a major and increasing bottleneck for their operations, affected their capacity to innovate.

Correct option is D

Explanation:
The highlighted segment “affected their capacity” is incorrect in tense and form. Since the clause describes a continuous effect, we need the present participle “affecting”.
Also, "affect" (verb) means to influence.
"Effect" is a noun meaning result; "effecting" is a less common verb meaning to bring about.
Correct sentence:
...operations, affecting their capacity to innovate.