Global Economic Prospects 2008: Technology Diffusion in the Developing World

World Bank Publications, 2008 M01 8 - 220 pages

'Global Economic Prospects 2008: Technology Diffusion in the Developing World' examines the state of technology in developing countries and the pace with which it has advanced since the early 1990s. It reveals both encouraging and cautionary trends. On the one hand, the pace of technological progress in developing countries has been much faster than in high-income countries-reflecting increased exposure to foreign technology as a result of linkages with high-skilled diasporas and the opening of these countries to international trade and foreign direct investment.On the other hand, the technology gap remains large, and the domestic factors that determine how quickly technologies spread within developing countries often stymie progress, especially among low-income countries. This year's 'Global Economic Prospects' comes on the heels of an extended period of strong growth and a 15 year period of strong performance in much of the developing world, which has contributed to substantial declines in global poverty. While high oil prices and heightened market volatility may signal a coming pause in this process, over the longer term continued technological progress should continue to push back poverty. 'Rapid technological progress in developing countries has been central to the reduction of poverty in recent decades. While the integration of global markets has played and will continue to play a key role in this, future success will increasingly depend on strengthening technical competencies and the business environment for innovative firms in developing countries.' - Graeme Wheeler, Managing Director, The World Bank

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Chapter 1 Prospects for Developing Countries	17

Figure 11 The perceived riskiness of highyield corporate bonds increased more than that of emerging market bonds	19

Figure 13 Global equity markets fall then recover led by emerging markets	20

Figure 14 A stepdown in growth in 2008	21

Table 12 The global outlook in summary 200509	22

Figure 15 Volatile patterns of growth among OECD countries	23

Figure 17 Robust growth in developing country industrial production	24

Table 13 Recent economic indicators developing regions 200507	25

Table A26 Factor loadings and variable weights for technological achievement subgroups	98

Table A28 Share of total variance explained by main principal components of technological achievement and technological absorptive capacityusing...	99

Recent Trends and Prospects	105

Figure 31 Domestic absorptive capacity both conditions and attracts external flows	108

Table 31 Trade in technology goods has increased in developing countries	111

Figure 32 Rising share of hightech imports	112

Different paths for different countries	113

Figure 33 Exports of low medium and hightechnology goods	114

Figure 18 Developing growth retains strong momentum during the first half of 2007	26

Figure 110 East Asia now accounts for onequarter of Chinas imports	27

Figure 112 Growth eases in 2007 for the Latin America and Caribbean region	28

Figure 113 Continued oil revenue gains support growth among Middle East and North Africa oil exporters	30

Box 11 Developing country exports in the wake of the removal of barriers to Chinese exports	31

Figure 114 South Asia growth is slowing as the Indian rupee appreciates	32

Table 14 Developments and prospects for world trade and payments	34

Figure 116 Weak US growth reduces demand for developing country exports	35

Figure 118 US current account narrows over 2007 and is likely to continue doing so	36

Figure 119 Inflationary pressures are rising in the Middle East and North Africa and SubSaharan Africa	37

Figure 121 Commodity prices continued gains through 2007 led by metals	38

Figure 123 Growth in the worlds demand for oil slows	39

Figure 125 Agricultural prices surge over 200607	40

Box 12 Biofuels	41

Box 13 Policy responses to rising food prices	42

Figure 127 Longterm growth 19802030	44

Figure 128 Declining capitalled growth for developed countries 200230	45

Table 15 Poverty in developing countries by region selected years	46

Chapter 2 Technology and Technological Diffusion in Developing Countries	51

Table 21 Disparity among TFP levels remains wide	54

Box 21 Technology can contribute to welfare without affecting measures of shorttermoutput	55

Box 22 Technological innovation may spur further innovation in upstream and downstream activities	56

Box 23 Promoting appropriate technologies in Rwanda	57

Box 24 Shortcomings of available measures of technological achievement	60

Figure 21 Patent activity is rising in middleincome countries	61

Box 25 Deepwater petroleum technology in Brazil	62

Figure 22 Electrical consumption varies markedly even at similar income levels	63

Table 23 Indicators of the diffusion of older technologies	64

Figure 23 Rail and road densities rise with income and population density	65

Figure 24 Telephone densities are highly correlated with income but airtransport is not	66

Table 24 Affordability of fixedline phones falls rapidly with lower incomes	67

Table 25 Immunization rates lag significantly in South Asia and SubSaharan Africa	68

Table 26 Diffusion of both water and sanitation technology is low in rural areas	69

Box 27 Technology and growth in Latin Americas natural resourcebased economies	71

Table 27 Diffusion of recent technologies	72

Figure 25 The incidence of Internet use varies widely across countries	73

Box 28 Innovative use of communications technology is improving financial access for the poor	75

Figure 26 Logistics performance in the world	77

Table 210 Indicators included in summary indexes of technological achievement	79

Figure 27 Distribution of technological achievement by dimension	80

Table 211 Technological achievement in developing countries relative to that in highincome countries	81

Figure 28 Increase in summary technological achievement subindexes 1990s2000s	82

Figure 29 Alternative summary indexes of technological achievement	83

Figure 210 Technological achievement rises with income levels	84

Figure 211 Comparison of levels of technological achievement early 1990s andearly 2000s	85

Table 213 Overall technological progress in absolute and relative terms	86

Table 214 Successful diffusion has accelerated	88

Table 215 The pace at which technology diffuses has picked up among successful adaptors	89

Table 216 Slow diffusion means that many developing countries never reach the 25 or 50 percent threshold	90

Box 29 The technological divide with in India	91

Table A21 Indicators used to calculate the summary indexes and overall index related to technological achievement	95

Table A22 Indicators used to calculate the summary indexes and overall index of technological absorptive capacity	96

Table A25 Share of total variance explained by principal components for each subgroup of indicators	97

Table 32 Foreign direct investment as a percent of GDP	116

Figure 34 Share of foreign affiliates in business RD expenditure	117

Box 32 European call centers in the Maghreb have inspired local entrepreneurs and prompteda specialization in highvalueadded services	118

Box 34 WalMarts entry in Mexico boosted the Mexican soaps detergents and surfactants industry	119

Figure 35 Licensing payments have risen sharply	121

Figure 36 The brain drain is a severe problem in a number of small countries	123

Figure 37 Share of PhD students still living in the United States five years after graduation	124

Some examples	125

Figure 39 Most developing countries have increased their exposure to external technology	128

Figure 310 Number of countries in conflict worldwide	129

Table 36 Macroeconomic stability has improved in developing countries	130

Table 37 The regulatory burden is heavier in developing countries than in the OECD	131

Figure 311 Efficiency of contract enforcement	132

Figure 313 Regional averages of six governance indicators	133

Figure 314 Per capita incomes have accelerated in recent years	134

Table 38 Educational attainment indicators	135

Table 39 Relatively high youth literacy rates	136

Figure 316 Educational expenditures have risen in some regions	137

Figure 317 Many developing country students fail to meet literacy standards	138

Table 310 Weak financial intermediation hinders technology in developing countries	139

Table 311 RD intensities have increased	141

Box 36 Principal market failures impeding technological progress in developing countries	143

Brazilian biofuels	144

Box 38 A successful government program of technological development and innovation financing in the Republic of Korea	145

Figure 318 Levels of intellectual property protection	146

Figure 319 Level of and recent changes in technological absorptive capacity	149

Box 39 Technology in 2020	152

Regional Economic Prospects	165

Figure A2 Except for China inflation is now stabilizing across East Asia	166

Table A2 East Asia and Pacific country forecasts	168

Figure A3 Performance improves for East Asian countries other than China	169

Table A3 Europe and Central Asia forecast summary	170

Figure A4 Mixed growth outturns across Europe and Central Asia	171

Figure A6 Growth in Europe and Central Asia eases into 2009	173

Table A4 Europe and Central Asia country forecasts	174

Figure A7 Growth outturns were mixed across Latin America in 2007	176

Figure A8 Latin American inflation eases over the last 15 years	177

Figure A10 Growth in Latin America and the Caribbean eases into 2009	179

Table A6 Latin America and the Caribbean country forecasts	180

Credit	183

Figure A14 Export market value concentration is falling	184

Table A7 Middle East and North Africa forecast summary	185

Figure A16 Hydrocarbon exports continue to rise on higher prices modest volume gains	186

Figure A17 Tourism and remittances offset widening trade deficits for Maghreb and Mashreq countries	187

Table A8 Middle East and North Africa country forecasts	188

Figure A18 Middle East and North Africa equities rebound from the mid2007 slump	189

Figure A19 South Asian economies ease into 2007	190

Table A9 South Asia forecast summary	192

Figure A21 Growth in SubSaharan Africa has accelerated markedly	194

Table A12 SubSaharan Africa country forecasts	195

Figure A22 reaching a 35year high in oilexporting countries	198

Figure A23 and a 10year high in oilimporting countries	199

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Common terms and phrases

average billion biofuels Caribbean Central Asia China countries Low-income countries creased Current account balance/GDP decline developing countries diaspora East and North East Asia Economic Europe and Central external Figure firms Forecast Foreign Direct Investment GDP at market GDP deflator GDP growth global high-income countries imports improved income countries Income groups increased India industry inflation inflows infrastructure innovation International Latin America literacy Lower-middle-income countries market pricesb ment Middle East middle-income countries mobile phones monetary nologies North Africa OECD oil prices older technologies overall Pacific patents penetration percent change percent in 2007 percent of GDP percentage points population principal components analysis production recent region relatively Republic sector Source South Asia spillovers strong Sub-Saharan Africa Table tech techno technological absorptive capacity technological achievement technological progress technology diffusion Technology Transfer tion trade U.S. dollars Upper-middle-income countries Washington World Bank World Development Indicators

Popular passages

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Bibliographic information

Title	Global Economic Prospects 2008: Technology Diffusion in the Developing World Global Economic Prospects
Author	World Bank
Publisher	World Bank Publications, 2008
ISBN	0821373668, 9780821373668
Length	220 pages

Export Citation	BiBTeX EndNote RefMan

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