andrew burns world bank june 2008 l.
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Andrew Burns World Bank June, 2008. Technology diffusion in the developing world. Technology diffusion in the developing world. The technology gap between rich and poor countries has narrowed -- but remains large

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Technology diffusion in the developing world


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technology diffusion in the developing world
Technology diffusion in the developing world
  • The technology gap between rich and poor countries has narrowed -- but remains large
  • Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
  • Globalization has been a main driver of technological progress
  • Technology diffusion across countries has picked up, but diffusion within countries remains slow and penetration rates uneven
  • Persistent weakness in technological absorptive capacity may constrain further technological progress
measuring technological achievement
Measuring technological achievement
  • Started out with some 70+ candidate series, final selection based on time-series availability and cross-country coverage
  • Final index based on 20 sub-indicators along 4 dimensions
    • Scientific innovation and invention
    • Penetration of older technologies
    • Penetration of recent technologies
    • Exposure to foreign technologies
  • Used principal components to provide flexible data-driven weighting scheme for each sub-index and the overall index.
technology gap narrowing but still wide
Technology gap: narrowing but still wide

Index of technological achievement, high-income countries=100

1990s

2000s

Source: World Bank, Global Economic Prospects (2008)

there is significant variation in achievement within regions
There is significant variation in achievement within regions

Index of technological achievement

South Asia

Latin America & Caribbean

Europe and Central Asia

Mid-East & N. Africa

Sub-Saharan Africa

East Asia

technology diffusion in the developing world6
Technology diffusion in the developing world
  • The technology gap between rich and poor countries has narrowed -- but remains large
  • Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
  • Globalization has been a main driver of technological progress
  • Low levels of human capital, uneven distribution of older technologies and low rural penetration rates are important weaknesses
  • Persistent weakness in technological absorptive capacity may constrain further technological progress
developing countries are scarcely active at the global technology frontier
Developing countries are scarcely active at the global technology frontier

Intensity of scientific innovation and invention, High-income countries=100

Source: World Bank, Global Economic Prospects (2008)

technology progress is mainly about absorbing and adopting technologies developed elsewhere
Technology progress is mainly about absorbing and adopting technologies developed elsewhere

Exposure to foreign technology

+

Capacity to absorb

=

Technological progress

Technology in the developing country

In-country diffusion

Source: World Bank, Global Economic Prospects (2008)

technological diffusion within countries is key
Technological diffusion within countries is key
  • Leading firms and cities use technologies relatively intensively
    • But rural areas lag (70% urban cell phones in India, 7% rural)
    • Physical, human and regulatory infrastructure matter
  • Technology diffuses mainly through the actions of firms and individuals:
    • New-to-the-market innovations: Successful introduction of cut flower industry into Colombia, Kenya
    • New-to-the-firm innovations: Adoption of cell phones or internet into the operations of firms
  • Therefore commercialization / diffusion is as (more?) important as R&D
slide10

Technology diffusion in the developing world

  • The technology gap between rich and poor countries has narrowed -- but remains large
  • Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
  • Globalization has been a main driver of technological progress
  • Low levels of human capital, uneven distribution of older technologies and low rural penetration rates are important weaknesses
  • Persistent weakness in technological absorptive capacity may constrain further technological progress
market openness and contact with the diaspora stimulate technology transfer
Market openness and contact with the diaspora stimulate technology transfer

Size of diaspora

(% of origin-country population)

High-tech Imports (% of GDP)

Upper-middle

Lower-middle

Low income

Source: CEPII, BACI database; World Development Indicators

technology diffusion in the developing world12
Technology diffusion in the developing world
  • The technology gap between rich and poor countries has narrowed -- but remains large
  • Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
  • Globalization has been a main driver of technological progress
  • Technology diffusion across countries has picked up, but diffusion within countries remains slow and penetration rates uneven
  • Persistent weakness in technological absorptive capacity may constrain further technological progress
technology diffusion in the developing world14
Technology diffusion in the developing world
  • The technology gap between rich and poor countries has narrowed -- but remains large
  • Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
  • Globalization has been a main driver of technological progress
  • Technology diffusion across countries has picked up, but diffusion within countries remains slow and penetration rates uneven
  • Persistent weakness in technological absorptive capacity may constrain further technological progress
measuring technological absorptive capacity
Measuring technological absorptive capacity
  • Index based on 15 sub-indicators along 4 dimensions
    • Basic and advanced technological literacy
    • Governance
    • Macroeconomic environment
    • Financial structure and intermediation
  • Weights for summary and overall index derived using principal components analysis.
progress in absorptive capacity
Progress in absorptive capacity

Substantial improvements

  • Macroeconomic environment
  • Financial structure and intermediation

Relatively weak improvements

  • Basic and advanced technological literacy
  • Regulatory environment and governance
despite high enrolment rates few students pass standardized tests 2000s
Despite high enrolment rates, few students pass standardized tests (2000s)

Sixth graders

Fourth graders

% of relevant population

Sources: SACMEQ II (2000), PIRLS (2001), and DHS

slide18

The rise in technological achievement tends to flatten out as income rise

Technological achievement versus per capita income by region

slide19

The rise in technological achievement tends to flatten out as income rise

Technological achievement versus per capita income by region

All countries

slide20

The rise in technological achievement tends to flatten out as income rise

Technological achievement versus per capita income by region

All countries

Europe & Central Asia

slide21

The rise in technological achievement tends to flatten out as income rise

Technological achievement versus per capita income by region

All countries

Europe & Central Asia

Latin America & Caribbean

key features of a pro technology policy stance
Key features of a pro-technology policy stance
  • No detailed roadmap for promoting technological progress, but certain policy directions are indicated:
    • Maintain openness to trade, foreign direct investment and participation of diaspora
    • Further improve the investment climate so as to allow innovative firms to grow and flourish
    • Improve basic infrastructure (roads, electricity, telephony)
    • Raise the quality and quantity of education throughout economy not just major centers
    • Emphasize technology diffusion by reinforcing dissemination systems and the market-orientation of R&D programs