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Technology diffusion in the developing world Andrew Burns World Bank June, 2008.
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Transcript of Technology diffusion in the developing world Andrew Burns World Bank June, 2008.
Technology diffusion in the
developing world
Andrew Burns
World BankJune, 2008
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
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
1. Scientific innovation and invention2. Penetration of older technologies3. Penetration of recent technologies4. 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
0
20
40
60
80
100
120
High Income Upper MiddleIncome
Lower MiddleIncome
Low Income
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
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
East Asia Europe and Central Asia
Latin America & Caribbean
Mid-East & N. Africa
South Asia
Sub-Saharan Africa
Index of technological achievement
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
0
20
40
60
80
100
High-income Upper-middle-income
Lower-middleincome
Low income
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
Source: World Bank, Global Economic Prospects (2008)
Technology in the developing country
Exposure to foreign
technology
Capacity to absorb
=
+
Technological progress
In-country diffusion
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
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
Technology diffusion in the developing world
0%
1%
2%
3%
4%
5%
6%
EastAsia
EmergingEurope
LatinAmerica
Mid. East& N.
Africa
SouthAsia
Sub-SaharanAfrica
Market openness and contact with the diaspora stimulate technology transfer
0
2
4
6
8
10
1993 1996 1999 2002
High-tech Imports (% of GDP)
Source: CEPII, BACI database; World Development Indicators
Upper-middle
Low income
Lower-middle
Size of diaspora (% of origin-country population)
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
Diffusion across countries has accelerated but penetration within countries remains weak
0
20
40
60
80
100
1800s 1900-50 1950-75 1975-00
Years for technology to reach countryPercent of countries to reach 25% penetration threshold
Year technology invented
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
Index based on 15 sub-indicators along 4 dimensions
1. Basic and advanced technological literacy 2. Governance3. Macroeconomic environment4. Financial structure and intermediation
Weights for summary and overall index derived using principal components analysis.
Progress in absorptive capacity
Substantial improvements1. Macroeconomic environment2. Financial structure and intermediation
Relatively weak improvements1. Basic and advanced technological literacy 2. Regulatory environment and governance
Despite high enrolment rates, few students pass standardized tests (2000s)
0
20
40
60
80
100
SouthAfrica
Uganda Namibia Malawi Turkey Argentina Colombia Morocco
Enrolment
Meet standard
Sixth graders Fourth graders
Sources: SACMEQ II (2000), PIRLS (2001), and DHS
% of relevant population
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0 5000 10000 15000 20000 25000 30000 35000 40000
All Log. (All)
Technological achievement versus per capita income by region
The rise in technological achievement tends to flatten out as income rise
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0 5000 10000 15000 20000 25000 30000 35000 40000
East Asia & Pacific Europe & Central Asia Latin America & CaribbeanMiddle East & North Africa South Asia Sub-Saharan AfricaHigh income OECD High income Other AllLog. (Europe & Central Asia)
Technological achievement versus per capita income by region
All countries
The rise in technological achievement tends to flatten out as income rise
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0 5000 10000 15000 20000 25000 30000 35000 40000
East Asia & Pacific Europe & Central Asia Latin America & CaribbeanMiddle East & North Africa South Asia Sub-Saharan AfricaHigh income OECD High income Other AllLog. (All) Log. (Europe & Central Asia)
Technological achievement versus per capita income by region
Europe & Central Asia
All countries
The rise in technological achievement tends to flatten out as income rise
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0 5000 10000 15000 20000 25000 30000 35000 40000
East Asia & Pacific Europe & Central Asia Latin America & CaribbeanMiddle East & North Africa South Asia Sub-Saharan AfricaHigh income OECD High income Other AllLog. (All) Log. (Europe & Central Asia) Log. (Latin America & Caribbean)
Technological achievement versus per capita income by region
Europe & Central Asia
All countries
The rise in technological achievement tends to flatten out as income rise
Latin America & Caribbean
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
For more info:
http://www.worldbank.org/gep2008
Technology diffusion in the
developing world