By Dr Arkebe Oqubay, Senior Minister and Special Advisor to the Prime Minister of Ethiopia
This blog is part of a series marking the upcoming
19th International Economic Forum on Africa
Policy makers and academics alike puzzle over why some countries achieve economic ‘growth miracles’ while others lag behind. Of the 100 middle-income economies in 1960, fewer than a dozen transitioned into high-income economies. Economic history and empirical observations show that progress is linked to how nations learn and more specifically to the processes of technological learning, industrial policy, and catch-up. By looking at the cases of Japan, the United States, China and Ethiopia, I argue that commitment to learning by governments and dynamic technological learning by firms are key to economic catch-up. How these and other nations learn can provide valuable insight for African countries.
How did Japan overtake Europe in the mid-20th century?
The key driver of catch-up in Japan was technological learning and an active industrial policy. Japan’s learning experience involved the transfer of skills and knowledge, the importation of equipment and the acquisition of turnkey projects to develop technological capability. Japan also developed industrial infrastructure, including railways and the telegraph, by deploying state-owned enterprises. Continue reading
Innovation promotes the global economy’s sustained growth, and innovation in developing countries can be achieved through two main means: independent research and development (R&D) or technology adoption. It is generally believed that developing countries can achieve development at a lower cost and faster by adopting technology. Even though enterprises are subject to certain restrictions in their technology adoption, such as mergers and acquisitions (M&As) that may be rejected due to national security factors, is it still relevant to depend on the adoption of technology for innovation to achieve continuous development?
The numerous initiatives created over the last 20 years using Information and Communication Technologies for Development (ICT4D) have transformed the lives of many people living in poorer countries. However, at the same time, they have also greatly increased the economic power and wealth of the owners and shareholders of large global technology corporations. In 2017, Oxfam reported that eight men owned the same wealth as the poorest half of humanity; five of these men made most of their wealth directly from the technology sector.
Billions of people at the world’s economic ‘’margins’’ are experiencing a moment of changing connectivity. In Manila, Manchester, Mogadishu, the banlieues of Marseille and everywhere in between, the world is becoming digital, digitised and digitally mediated at an astonishing pace. Most of the world’s wealthy have long been digitally connected, but the world’s poor and economically marginal have not been enrolled in digital networks until relatively recently. In only five years (2012–2017), over one billion people became new Internet users (ITU 2016). In 2017, Internet users became a majority of the world’s population. The networking of humanity is thus no longer confined to a few economically prosperous parts of the world. For the first time in history, we are creating a truly global and accessible communication network.
The rapid rise of the Internet, together with emerging technologies of the Fourth Industrial Revolution such as Artificial Intelligence (AI), advanced robotics and drones, Blockchain, the “Internet of things” (IoT) and 3D printing, are unleashing new opportunities and transforming the global economy. While these technological advances can address some of the most pressing 21st century challenges – from education, health care and public services to agriculture, economic inclusion and the environment – the benefits are not being shared equally. Despite Internet connectivity having finally reached 50% of the world’s population in 2018, the rate of Internet access growth has slowed down considerably.
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