Dynamic efficiency is, by definition, the rate of increase in productive efficiency .
In other words, it is the rate of decline of the AC curve. If Cyrix improves its productive efficiency more rapidly than Intel, then Cyrix is more dynamically efficient than Intel. Dynamic efficiency is enormously important for the long-run standard of living of a society. Unless AC curves fall, you can only improve people's standard of living by building more capital goods and working more hours. If you innovate, you may not reap much of the gain if everyone can cheaply imitate you.