Developing countries must make technology a priority

Most people are aware of the huge inequalities of income that now separate the developed and developing world

Most people are aware of the huge inequalities of income that now separate the developed and developing world. Fewer people recognise that the gaps between rich and poor in terms of science and technology are even larger than the gaps in income.

While rich countries account for around 16 per cent of the world's population, and around 60 per cent of the world's purchasing power, they account for around 99 per cent of the patents for new inventions granted by the US and Europe in recent years. If we are serious about narrowing the income gaps between the rich and poor, we had better think seriously about how to raise the outputs of science and technology directed at the problems of poor countries.

In today's world, economic prosperity comes not from natural resources or production of industrial goods such as coal and steel, but from the production of new ideas and new products. The dynamic US economy owes its great advantage to a tremendous capacity to innovate whether in information technologies such as computer hardware and software, or biotechnology such as new medicines and crop varieties, or new telecommunications technologies such as advanced fibre optics and earth satellites.

The world's poorest countries, by contrast, hardly innovate at all. As a result, many of them rely on exports of primary commodities with little change in the composition of exports or their methods of production year after year, or even decade after decade.

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Thus, many tropical countries continue to live off the same mix of coffee, tea, cacao, bananas, or mining products that they did a generation ago. In the case of many of these commodities, world prices have declined sharply during the period (at least relative to the cost of imports), but the poorest countries lack the flexibility and innovative capacity to shift to new types of production, much less to produce entirely new products not previously seen in world markets.

Recent data for the US Patent and Trademark Office tells an amazing story. Of the 163,000 patents issued by the US in 1998, 90,000 were issued to US inventors and 72,000 to foreign inventors. Of the foreign inventors, Japanese inventors received 32,000 patents, German inventors 9,500 patents, and another 28,000 among the next 15 countries, all of which are developed economies.

Three of these - Korea, Taiwan, and Israel - were considered developing countries a decade ago, but each has achieved rapid and sustained growth for many years, in no small part due to their scientific prowess. The combined patents coming from developing countries and transition (post-communist) economies in 1998 amount to less than 1 per cent of the US total patents last year.

Tropical countries, almost all of which are poor, had virtually zero share of the total patents (Singapore being the only notable exception).

It might be considered normal that developed countries would be the inventors, and developing countries the users, or new technologies. But the status quo is very risky for poorer countries. With the developing world relying almost totally on innovation from the rich countries, many of the most pressing problems that are unique to poorer countries remain neglected by the world's scientists and leading high-technology industries.

Very few countries, particularly Israel, Korea, and Taiwan, have made the transformation to being producers of high-tech products. They have gotten rich in the process. It's time for the developing world to put science and technology much higher among their policy priorities.

The list of needed policy changes includes the following measures: strengthening the university system; increasing public-sector spending on scientific institutes; attracting high-technology firms to invest in the developing countries; shifting international aid money away from IMF-World Bank structural adjustment lending and towards research and development in priority areas (such as health and agriculture).

Such steps would help to increase the vitality of science and technology in the developing countries, and thereby give new energy to their overall economic development.

Jeffrey D. Sachs is the Director of the Centre for International Development at Harvard University and an economic adviser to governments in Latin America, Africa, Europe and Asia. Copyright: Project Syndicate.