Entrepreneurship and Innovation in Developing Countries : How the ITA can help Bruno Lanvin, the...
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Transcript of Entrepreneurship and Innovation in Developing Countries : How the ITA can help Bruno Lanvin, the...
Entrepreneurship and Innovation in Developing Countries :
How the ITA can help
Bruno Lanvin, the World Bank
WTO, Geneva – 18 October 04
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
Engines of globalization
Four Ways ofBeing Global
(2003)
Source: Foreign Policy and A.T. Kearney
Is Globalization Slowing Down?Globalization advanced briskly until 1997, when the financial crises that hit various developing regions weakened trade flows and undercut gains in global integration. So why did overall integration still increase during this period? Simple: Technology has become the engine of globalization.
Technology factors: Percentageof population online, number of internet hosts per capita, and number of secure servers per
capitaNon-technology factors: Tradein goods and services, capital flows, and personal contact.
Source: Foreign Policy and A.T. Kearney
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
Obstacles to entrepreneurship in DCs
Source: World Development Report, 2005 (World Bank)
Source: World Development Report, 2005 (World Bank)
Source: World Development Report, 2005 (World Bank)
Sources of growth
Growth in inputsEfficiency in factor allocationInnovation (useful knowledge)
Vehicles (trade, FDI,..)Cross-border educationetc …
Rule of LawCorruption
Growth
InnovationEntrepreneurship
RegulatoryCompetitionFramework
Governance
T of TechOpenness
IPRs
ExportsInternationalcompetition
TradePolicy
Niches &Alliances
F.D.I.
Domesticsavings
Monetary& FiscalPolicies
Macro-Economic
Policies
CapitalFormation
GlobalReach
Growth, Innovation, Enterpreneurship
The crucial role of innovation
Technological innovationDisruptive vs incremental ?Individual vs collective
Process innovationNon technological innovationShifting value along the chain
Source: World Development Report, 2005 (World Bank)
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
8.00
Leaders
Fac
ilit
ato
rs
y = 0.6839x + 1.93992
R = 0.3991
GUA
ZIM
PAR
BOL
VEN
ARG
HON
ECU
PAN
EGY
ELS
PHI
PER
INO
TUR
ROM
NICBAN
NIA
MAU
UKR
RUS
URU
GRE
BUL
DOM
JOR
SLK
POL
COS
COL
TRI
MEX
SAFSLV
LIT
LAT
VIE
JAM
THA
INI
CHL
ITA
BEL
GER
AUT
NOR
SRICZE
LUX
HUN
CHN
IRE
MLT
POR
BRA
NWZ
JAPEST
NETAUL
FRA
SPADEN
KOR
SWIICE
SWEUSA
HKG
UK
CAN
ISR
TAI
FIN
SIN
2.00
3.00
4.00
5.00
6.00
7.00
2.00 3.00 4.00 5.00 6.00 7.00
Note : the ‘Government’ variable of the GITR index has been used as proxy for Government leadership (x), whereas ‘Competition in telecoms’ has been used as an indicator of the effectiveness of Governments as facilitators (y)
First circle (top performers)
Second circle (the contestants)
Third circle (ready or not)
Strong Public Sector
Source : World Economic Forum/INSEAD/infoDev
Multi-purpose IT The example of trade facilitation
Trade competitiveness
Attraction of FDI
Governance (transparency, accountability,..)
Potential for additional off-shoring ?In G-7 countries, 1-5% of active population could be affected (World Bank 1995)
Maximum number of current jobs affected in US: 14 mn (Bardhan and Kroll 2003)
Projected number of US services jobs outsourced by 2015 : 3.4 mn (Forrester 2004)
In financial services alone, 2 mn jobs could be affected during the next 5 years (Deloitte & Touche 2003)
70% of the biggest 1000 firms have not outsourced services jobs towards lower-cost countriesDelayed cost-savings measured are estimated at 20-40%Source : World Investment Report, 2004 (UNCTAD)
IT and development
GlobalizationEntrepreneurship, innovation and growthEfficiency and transparencyRegulatory and legal frameworkIssues and challenges ahead
How can ITA help ?How is 2004 different from 1996 ?
Globalization becoming information-centric (competitiveness, efficiency, governance) Life-cycle of IT products becoming shorter
(=> lesser tolerance to procedural obstacles)
Mainstreaming of IT as a development tool (DOT Force, MDGs, WSIS)
Proper regulatory and legal frameworks have proved their power to bring prices down internallyITA can contribute to turn all of the above into powerful instruments for development
Merci