"Digital Transitions: The POLIS Theory and The NIEs"

In the fast developing digital technological revolution even the newly industrialized economies (the NIEs) have found it hard to catch up and maintain the pace required for not falling behind. The developing economies are clearly at a great disadvantage in such a fast paced technological race. Thus there is a digital divide that is growing and through a cumulative causation the gap will widen further unless coordinated action is taken. This paper discusses some of the most important economic issues conceptually and offers some modest policy advice. The basic problem of adoption of a new technology system such as the ICT( information and communications technologies) is explored via the theory of a positive feedback loop innovation system (POLIS) in a nonlinear, path-dependent world where institutional structure and its evolution matter crucially. By investing strategically in physical, intellectual and other forms of human and organizational capital as well as building new institutions of cooperation the NIEs may be able to forge a path not only in the ICT sectors, but also create innovation systems of their own that can be extended to region-wide systems. Under the emerging globally competitive market environment this will be the best way to compete dynamically. However, creating comparative advantage in this way requires capabilities that many NIES in Asia will need to promote. Creative policy interventions with a mix of market promotion, good governance, relative openness, and promotion of sustainable development in an equitable manner are necessary if the NIEs are not to be left far behind. The theoretical approach developed here also allows to evaluate the state of the economy and society ethically by extending and incorporating Amartya Sen's capabilities approach within the POLIS.

Innovative Asia: Advancing the Knowledge-Based Economy - Highlights of the Forthcoming ADB Study Report

[Excerpt] The development of knowledge-based economies (KBEs) is both an imperative and an opportunity for developing Asia. It is an imperative to sustain high rates of growth in the future and an opportunity whereby emerging economies can draw from beneficial trending developments that may allow them to move faster to advance in global value chains and in position in world markets. Over the last quarter of a century, driven mostly by cheap labor, developing countries in Asia have seen unprecedented growth rates and contributions to the global economy. Sustaining Asia’s growth trajectory, however, requires developing economies to seek different approaches to economic growth and progress, especially if they aspire to move from the middle-income to the high-income level. KBE is an important platform that can enable them to sustain growth and even accelerate it. It is time for Asia to consolidate and accelerate its pace of growth. Asia is positioned in a unique moment in history with many advantages that can serve as a boost: to name a couple, an expanding middle of the pyramid—Asia is likely to hold 50% of the global middle class and 40% of the global consumer market by 2020; and the growing importance of intra-regional trade within Asia, increasing from 54% in 2001 to 58% in 2011. Many developing economies are well placed to assimilate frontier technologies into their manufacturing environment

Knowledge-based industry and regional growth

One of the most important but less understood phenomena in the beginning of the 21st century has been a shift toward knowledge-based economic activity in the comparative advantage of modern industrialized countries. Two broad trends has been observed in the global economy. That is, the output from the world's science and technology system has been growing rapidly and the nature of investment has been changed (MILLER, 1996). The relative proportions of physical and intangible investment have changed considerably with the relative increase of intangible investments since the 1980s. In addition, there has been increased complementarity between physical and intangible investments and more important role of high technology in both kinds of investment (MILLER, 1996). Even in the newly industrialized countries, the growth of technology intensive industries, the increase of R&D activities and the growth of the knowledge intensive producer services have been common feature in recent years. In this change of the structure of productive assets, the role of knowledge is well recognized as the most fundamental resources in recent years (OECD, 1996; WORLD BANK, 1998). The development of information and communication technology (ICT) and globalisation trend have promoted this shift toward knowledge-based economy

ICT Leapfrogging Amidst Labour Force-Economic Growth Nexus in EAP and ECA Regions

Towards achieving the 2030 United Nations Sustainable Development Goals, this study revisits the information and communication technology (ICT) leapfrogging hypothesis of Steinmueller (2001), and Fong (2009) to expand the literature by testing its relevance in the labour force-growth dynamics in Asia. To achieve this, the study addresses four objectives: (i) test the ICT leapfrogging hypothesis; (ii) investigate the growth-enhancing impact of labour; (iii) examine whether ICT enhances or distorts the productivity of labour on economic growth; and (iv) if these effects differ by economic development. The study uses an unbalanced panel data on 81 countries located in East Asia and Pacific (EAP) and Europe and Central Asia (ECA) from 2010 to 2019. Two estimation techniques, namely panel spatial correlation consistent fixed effects (PSCC-FE) and random effects instrumental variables two-stage least squares (RE-IV2SLS), are deployed. To appraise if the impact differs by economic development, the study engages income group analysis. Among other findings: the leapfrogging hypothesis holds; labour is a significant predictor of economic growth; mobile phones usage is a more potent ICT indicator with more leapfrogging potentials relative to fixed telephones subscription; the net effect of labour on growth is mostly positive in the mobile phones’ models

Telecommunications networks and services in Estonia. Lessons to other European countries.

Estonia has shown somewhat remarkable developments in the telecommunications – or more precisely, building up an efficient network of modern information and telecommunications technologies (ICTs) for the Information Society. This paper takes a look at the development of telecommunications infrastructure networks and services in Estonia. The study also evalu-ates what other countries could learn from Estonia. More specifically, by this study we at-tempt at answering whether Estonia is as successful as data suggests, what the factors behind this success are, and whether there are lessons to be learned for the entire European territory. The paper introduces to the development of the telecommunications infrastructure and ser-vices in Estonia, by presenting facts and figures, and comparing the progress of the country with that of other European countries. It also discusses the measures that have helped Estonia on the road to Information Society. The results show that in summary the success of Estonia seems to have been a result of three things: Proximity of Finland and Sweden, active regula-tion and relative early liberalization, and a competition and entrant friendly market environ-ment. The paper is an outgrowth of the ESPON (European Spatial Planning Observation Net-work) project 1.2.2 “Telecommunications Services and Networks: Territorial Trends and Ba-sic Supply of Infrastructure for Territorial Cohesion” (see: http://www.espon.lu).

Internationalising to create Firm Specific Advantages: Leapfrogging strategies of U.S. Pharmaceutical firms in the 1930s and 1940s & Indian Pharmaceutical firms in the 1990s and 2000s

Internationalisation is a useful strategy to gain firm specific advantages during periods of technological discontinuity. The pharmaceutical industry offers us two such episodes as examples: when the antibiotics revolution was beginning and when the possibilities of genetic routes to new drug discovery were realised. This paper compares the strategies adopted by laggard U.S. firms scrambling to gain capabilities in antibiotics, and Indian firms equally eager to acquire positions in new biotechnology based drugs and shows that both groups used internationalisation strategies to gain technological advantages and build up their firm specific advantages.Technological leapfrogging, Internationalisation Strategies, Indian Pharmaceutical industry, Antibiotics revolution, US Pharmaceuticals

Is information and communication technology (ICT) the right strategy for growth in Mexico?

Although empirical evidence available suggests that information and communication technologies (ICT) have positively contributed to important sectors of the Mexican economy, it is still unknown to which extent ICT have truly contributed to productivity among these sectors. The increasing implementation and imports of ICT technologies, the growing demand for ICT-skilled human capital and training, the rising level of wages and the large demand and adoption of these technologies seem to indicate a positive correlation between ICT implementation and economic growth in Mexico. To answer whether ICT may be a key strategy for economic growth in the Mexican economy is the main purpose of this work. --Information technology,total factor productivity,growth,knowledge,human capital,technology diffusion

TECHNOLOGY LEAPFROGGING IN EUROPEAN HEALTH SYSTEMS: POLICY IMPLICATIONS FOR THE DIGITAL DIVIDE

The 27 Member States of the European Union are highly differentiated by population size, health expenditure, technology access and use, economic profile and demographics. This study builds on earlier digital-divide studies using a ICT and digital health taxonomy that positions countries as frontrunners (quartile 1), followers (quartile 2), leapfroggers (quartile 3), and laggards (quartile 4). The concept of technology leapfrogging is used to analyse the digital divide in Europe’s health systems. Results from multivariate statistical analysis show evidence of technology leapfrogging in some EU countries. However, digital health policy implications show a one-size-fits-all approach to digital health is unlikely to produce optimal outcomes. Rather, EU policy-makers will need to develop nuanced digital health policies which go beyond measuring technical imperatives