Uneven Paths of Development: Insights from Case Studies Banji Oyeyinka PhD Professorial Fellow,...

Uneven Paths of Uneven Paths of Development: Insights from Development: Insights from

Case Studies Case Studies Banji Oyeyinka PhDBanji Oyeyinka PhD

Professorial Fellow, UNU-MERITProfessorial Fellow, UNU-MERITDirector, Global Monitoring and Research Director, Global Monitoring and Research

Division, UN-HABITATDivision, UN-HABITAT

QuestionsQuestions

What is the precise mechanics of overcoming What is the precise mechanics of overcoming economic development challenges in different economic development challenges in different contexts?contexts?

At the heart of it all is about how economies at At the heart of it all is about how economies at different levels deploy the unending streams of different levels deploy the unending streams of information and knowledge to developmental ends. information and knowledge to developmental ends.

The notion of income convergence between the The notion of income convergence between the poorer poorer SouthSouth and the wealthy and the wealthy NorthNorth has proved a has proved a miragemirage

SettingsSettings

A new economic divide is evident within the A new economic divide is evident within the South itself, and as well, between regions and South itself, and as well, between regions and within regionswithin regions

The debate relating to latecomers is thus The debate relating to latecomers is thus framed in discussions about regions and framed in discussions about regions and countries that arrive late to mastering countries that arrive late to mastering industrialization; in achieving economic industrialization; in achieving economic prosperity through the use of knowledge prosperity through the use of knowledge

Knowledge Domains and Knowledge Domains and CapabilitiesCapabilities

Figure 1. Learning to Catch-up

Advanced

Learning

Learn

ing

Traje

cto

ry

Source: Authors Time Capabilities

Latecomer

Dynamic Latecomer

Advanced Latecomer

Advanced Industrial goods through design and re-design, High system linkages

Frontier Countries

Basic industrial Skills

Plant Operation

Design and re-design system engineering, Competing with Innovative Product

Re-design of old

product/ process

Catching Up in CapabilityCatching Up in Capability

Economic history shows that whereas Economic history shows that whereas countries move relatively easily from the countries move relatively easily from the lowest knowledge domain to the next higher lowest knowledge domain to the next higher one, moving further up into knowledge one, moving further up into knowledge domains that focus on incremental design and domains that focus on incremental design and innovation and then to frontier innovation is innovation and then to frontier innovation is ridden with significant difficulties and ridden with significant difficulties and widespread lack of success. widespread lack of success.


Several countries on a supposedly sound Several countries on a supposedly sound catch-up path often do not move as predicted catch-up path often do not move as predicted or regress along this path mainly due to the or regress along this path mainly due to the inability of these countries to manage the inability of these countries to manage the coordination efforts required in setting up a coordination efforts required in setting up a sound basis to move to the next knowledge sound basis to move to the next knowledge domain. domain.


Not enough to focus just on industrial policy Not enough to focus just on industrial policy that does not take into account the scale that does not take into account the scale effects, thresholds of scientists of engineers effects, thresholds of scientists of engineers and minimal standards of domestic knowledge and minimal standards of domestic knowledge infrastructureinfrastructure

Poor policy environment for domestic Poor policy environment for domestic innovation are common gaps in latecomer innovation are common gaps in latecomer countries. countries.

Learning to innovateLearning to innovate

Innovation is important because learning in the Innovation is important because learning in the course of producing certain goods are finite and in the course of producing certain goods are finite and in the end will approach a limiting value and stops end will approach a limiting value and stops altogether ‘altogether ‘in the absence of the introduction of new in the absence of the introduction of new technical processestechnical processes’. ’.

An industry, system of production or firm could not An industry, system of production or firm could not hope to rely indefinitely and exclusively on particular hope to rely indefinitely and exclusively on particular knowledge of production without new knowledge knowledge of production without new knowledge injected through innovation, within or outside of the injected through innovation, within or outside of the firmfirm. .

Learning to innovateLearning to innovate The sources of knowledge growth are not unique to The sources of knowledge growth are not unique to

any country and are often determined by an array of any country and are often determined by an array of historical factors;historical factors;

Much of the modern knowledge in forms of technical Much of the modern knowledge in forms of technical expertise and machinery would be imported from expertise and machinery would be imported from abroad; abroad;

Successful assimilation and subsequent knowledge Successful assimilation and subsequent knowledge creation occur over time and; creation occur over time and;

The rise in knowledge stock depends on the The rise in knowledge stock depends on the combined use of imported technology and domestic combined use of imported technology and domestic autonomous technical change efforts. autonomous technical change efforts.

Learning to innovateLearning to innovate

The wealth of a country is directly related to The wealth of a country is directly related to the creation, validation and use of knowledge;the creation, validation and use of knowledge;

See next figure: advance industrial nations See next figure: advance industrial nations have acquired high levels of knowledgehave acquired high levels of knowledge

Model of latecomersModel of latecomersGroup IGroup I

Frontier CountriesFrontier CountriesGroup IIGroup II

Fast FollowersFast FollowersGroup IIIGroup III

LatecomersLatecomers

1. United States1. United States2. Sweden2. Sweden3. Norway3. Norway4. Finland4. Finland5. Canada5. Canada6. Switzerland6. Switzerland7. United Kingdom 7. United Kingdom 8. Netherlands8. Netherlands9. Australia9. Australia10. Japan10. Japan11. Denmark11. Denmark12. Hongkong, China12. Hongkong, China13. Singapore13. Singapore14. France14. France15. New Zealand15. New Zealand16. Germany16. Germany17. Belgium17. Belgium18. Ireland18. Ireland19. Austria19. Austria20. Korea, Republic of20. Korea, Republic of21. Israel21. Israel22. Portugal22. Portugal23. Spain23. Spain24. Italy24. Italy

25. Malaysia25. Malaysia26. Greece26. Greece27. Slovenia27. Slovenia28. Brazil28. Brazil29. Estonia29. Estonia30. Czech Republic30. Czech Republic31. Hungary31. Hungary32. Bulgaria32. Bulgaria33. Phillipines33. Phillipines 34. Latvia34. Latvia35. South Africa35. South Africa36. Lithuania36. Lithuania37. Slovak Republic37. Slovak Republic38. Russian Federation38. Russian Federation39. Croatia39. Croatia40. China40. China41. Thailand41. Thailand42. Costa Rica42. Costa Rica43. Argentina43. Argentina44. Poland44. Poland45. Chile45. Chile46. Belarus46. Belarus47. Jordan47. Jordan48. Mexico48. Mexico

49. Panama49. Panama50. Ukraine50. Ukraine51. Turkey51. Turkey52. 52. GabonGabon53. Kazakhstan53. Kazakhstan54. Columbia54. Columbia55. Tunisia55. Tunisia56. Jamaica56. Jamaica57. Romania57. Romania58. Peru58. Peru59. Kyrgyz Republic59. Kyrgyz Republic60. Indonesia60. Indonesia61. Venezuela61. Venezuela62. Equador62. Equador63. Egypt, Arab Republic63. Egypt, Arab Republic64. Azerbaijan64. Azerbaijan65. India65. India66. Maldova66. Maldova67. Vietnam67. Vietnam68. Guatemala68. Guatemala69. Syria, Arab Republic69. Syria, Arab Republic70. Bangladesh70. Bangladesh71. Nigeria71. Nigeria72. Congo Republic72. Congo Republic73. Pakistan73. Pakistan74. Ghana74. Ghana75. Benin75. Benin

Ranking on Innovation CIRanking on Innovation CI

Insights from Our ResearchInsights from Our Research

We advance the notion of knowledge domains, We advance the notion of knowledge domains, technological capabilities and learning;technological capabilities and learning;

It makes a contribution to our understanding It makes a contribution to our understanding of levels of development (domains indicate a of levels of development (domains indicate a country stage in the catch-up ladder) and the country stage in the catch-up ladder) and the processes that links knowledge domains to processes that links knowledge domains to learning and accumulation of technological learning and accumulation of technological capabilities. capabilities.


Modes of learning are different for each stage Modes of learning are different for each stage of technological capabilities building, and of technological capabilities building, and these are intricately linked to knowledge these are intricately linked to knowledge domains;domains;


Frontier economies belong to the group domain Frontier economies belong to the group domain characterized by high science- intensive and characterized by high science- intensive and technology-intensive activities, with relatively high technology-intensive activities, with relatively high levels of domestic investment in R&D; levels of domestic investment in R&D;

Second, the frontier and fast learning group have Second, the frontier and fast learning group have developed the design engineering capabilities to developed the design engineering capabilities to relatively high level while late learners are largely relatively high level while late learners are largely engaged in mastering production engaged in mastering production


Third, the frontier and fast learners have also Third, the frontier and fast learners have also developed through explicit investment in developed through explicit investment in training high levels of skilled manpower, training high levels of skilled manpower, although a large number of countries classified although a large number of countries classified in the catch-up group are still intensifying in the catch-up group are still intensifying investments in building their scientific base.investments in building their scientific base.

The technological knowledge typologies have The technological knowledge typologies have three major implications for development.three major implications for development.


FirstFirst, there are apparent risks in comparing countries , there are apparent risks in comparing countries at different levels of industrial maturation and equally at different levels of industrial maturation and equally different industrial structures. different industrial structures.

Advanced latecomer countries such as Taiwan, China Advanced latecomer countries such as Taiwan, China and Malaysia that have built strong export sectors in and Malaysia that have built strong export sectors in electronics and telecommunication equipment have electronics and telecommunication equipment have raised the levels of GDP/capita in quite significant raised the levels of GDP/capita in quite significant fashions fashions


SecondSecond, knowledge growth in the form of rapid , knowledge growth in the form of rapid technological progress has led to deep going technological progress has led to deep going structural changes in the global economy that has structural changes in the global economy that has profound implications for developing countries. profound implications for developing countries.

It has led to the growth of technology-intensive It has led to the growth of technology-intensive sectors, which in terms of wealth creation; contribute sectors, which in terms of wealth creation; contribute far more to GDP than traditional and resource-based far more to GDP than traditional and resource-based sectors on a unit basis sectors on a unit basis


Third, Third, comparisons between countries - even comparisons between countries - even those that are simply based on the lines of those that are simply based on the lines of developed versus developing countries assume developed versus developing countries assume similar endowments and hence the ability to similar endowments and hence the ability to capture similar benefits from knowledge capture similar benefits from knowledge creation, dissemination and growth - are too creation, dissemination and growth - are too simplistic. simplistic.


An analytical framework that seeks to look at An analytical framework that seeks to look at these from a development perspective needs to these from a development perspective needs to create a nomenclature of institutions, create a nomenclature of institutions, capabilities and learning implications in order capabilities and learning implications in order to be able to draw conclusions regarding the to be able to draw conclusions regarding the role of local knowledge institutions in role of local knowledge institutions in promoting development promoting development


Differences in nature of tacit and codified Differences in nature of tacit and codified knowledge bring to the fore several issues of knowledge bring to the fore several issues of relevance to the design of local knowledge relevance to the design of local knowledge institutions. institutions.

Are there differences in the kinds of Are there differences in the kinds of institutions (formal and non-formal) that institutions (formal and non-formal) that promote the accumulation and growth of tacit promote the accumulation and growth of tacit and codified forms of knowledge? Is one a and codified forms of knowledge? Is one a pre-condition for the accumulation of another? pre-condition for the accumulation of another?


How do the two forms of knowledge interact How do the two forms of knowledge interact with institutions for economic growth in varied with institutions for economic growth in varied contexts? Such a framework should also help contexts? Such a framework should also help resolve the linkages between tacit and codified resolve the linkages between tacit and codified knowledge knowledge


For instance most of the current work focus on the For instance most of the current work focus on the success cases of East Asia “advanced” latecomers to success cases of East Asia “advanced” latecomers to understand the reasons and different pathways to understand the reasons and different pathways to success while much less has been done on the lagging success while much less has been done on the lagging (“falling behind”) firms and countries.(“falling behind”) firms and countries.

In studying these countries learning has come to be In studying these countries learning has come to be conceptualized on the strength of R&D carried out conceptualized on the strength of R&D carried out and patents taken just as in the case of industrialized and patents taken just as in the case of industrialized countries. countries.


In the lagging latecomers, learning is difficult to In the lagging latecomers, learning is difficult to quantify, measure or even observe because much of the quantify, measure or even observe because much of the activity, including incremental technical change is activity, including incremental technical change is experiential and tacit in nature. experiential and tacit in nature.

At a conceptual level, R&D is not equal to innovation At a conceptual level, R&D is not equal to innovation as it is as an instrument of learning. Non-R&D as it is as an instrument of learning. Non-R&D activities (prototype building, design and quality activities (prototype building, design and quality testing for instance) tend to consume a much higher testing for instance) tend to consume a much higher proportion of firm-level level investment in new proportion of firm-level level investment in new products and processes and this is highly disconnected products and processes and this is highly disconnected from the limited R&D taking place in the local from the limited R&D taking place in the local contexts contexts


In essence, orthodox measures create a In essence, orthodox measures create a misleading impression of the learning misleading impression of the learning processes in latecomer countries processes in latecomer countries

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Uneven Paths of Development: Insights from Case Studies Banji Oyeyinka PhD Professorial Fellow,...

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