How can we encourage technology and innovation in third world economies?

Question

Technology and innovation are critical to the success of any economy. Yet there are trade barriers that prevent economic development(like farm subsidies), political unstablility that discourages investent and lack of resources. How do we overcome these obstacles?

Answer 1

Technology (with adequite skills training!) often precedes development, as it creates a platform for interventions and further innovation. However, such technology should be developed by using local intelligence, or at the very least, collaborating prior to implementing with an assumption that "if it works for the first economy, it is good enough for the second economy". More than often, it is NOT - as the later requires more, and not less, to 'overcome obstacles' and barriers to entry unforeseen during product development.

It was already demonstrated that ICT (at least) can be a powerful tool for development, both because of ICT's inherent characteristics and the mounting empirical evidence that suggests it can in fact contribute a great deal to development goals. It can do so at both the micro and national level by increasing the effectiveness and reach of development interventions, enhancing good governance and lowering the costs of service delivery. Moreover, the right complement of targeted ICT interventions has the potential to play an even more substantial role in accelerating a sustainable dynamic of social and economic development in developing countries.

It is (in my opinion) also a myth that political stability is required prior to investment and aid, in order to avoid corruption. But lets not complicate the answer to your question... :)

Answer 2

The "political development should precede economic development" argument seems logical at first glance but actually is a "which came first?"-type conundrum. Political instability is often the result of economic backwardness. Less resources in a country mean war over the limited resources.

Some form of rational, global, economic development plan is required by a multinational organization like the United Nations. Otherwise, the third-world is trapped in an economic quagmire.

Answer 3

You're putting the cart before the horse. The third world needs to address their comparative advantage (usually labor, natural resources, and farming) so they may build the infrastructure (running water, roads, etc.) to make it to second world (a very long and difficult leap). Once they have achieved this (economies of scale, industrialization, specialization) then they can afford the luxuries of technology and innovation.

Answer 4

I would challenge your initial assertion that technology and innovation are critical to the success of any economy.

Third world economies, by definition, have abundant if unskilled labor and the general goal of the governments of these economies is to increase employment and raise the per capita income.

technology and innovation tend to be labor saving capital expenditures, and as such could be characterized as highly _undesirable_ for a third world economy.

let the natural (free) market forces work...

Answer 5

Technology and innovation are secondary to the quality of institutions. If a country has good institutions (protection of property rights, independent judiciary, etc.), it will eventually acquire the technology. If a country has bad (ineffectual or corrupt) institutions, they will stifle innovation forever.

Answer 6

Don't you hate it when people use frist-world textbooks to solve third-world problems? The problem with the theory of "stages of development" is that they are only applicable under assumptions.

The world today is much more complex, third-world countries seem to play the role of laborer, miner and farmer, selling raw materials to first worlders, then first worlders turn these raw materials into products and sell them to third world consumers for profit. This results to huge trade deficits in third-world countries, huge deficits means no funding for education and R&D.
Technology, will give third world countries and upper-hand, technology will enable them to refine the raw materials themselves and sell it for more profit. This is an incentive for first world countries to invest in third-world countries, since the raw materials will be cheaper, since it is acquired locally, and labor is also cheap. Capital comming in from first world countries will boost up the technology level of the third world country. However, because of politcal instability, investors are leery on investing in third world countries, so the answer to your question is, third world countries will need to fix their politcal problems first.

Answer 7

They need a teacher/s to go over there and teach them enough so they can sustain themselves.