Where are the innovation leaders?
Global economic conditions continue to deteriorate, including where economic growth is needed the most – across most developing regions. Preliminary estimates by UN DESA reveal that the average GDP growth in developing economies could fall below 4 per cent in 2019, amid lingering fragilities in Argentina, Brazil and South Africa, and weaker economic conditions in Mexico, Saudi Arabia and Turkey.
A range of diverse factors are causing the prolonged slump that has been affecting developing regions since 2015. The knock-on effects from the collapse in commodity prices and the impact of policy uncertainties on investor and consumer confidence have recently been exacerbated by the escalation in global trade tensions.
But the growth slowdown in developing countries is also rooted in structural factors. Many countries are being held back by a weak innovation base and limited technological capabilities. Progress on innovation has differed markedly across regions, with East Asia performing better than other developing regions, while Africa and South Asia continue to lag behind.
In many cases, lagging countries suffer from a limited number of scientists and engineers, and a mismatch between skills developed through the education system and those required by local industry. Moreover, public and private investments in research and development tend to be low and the cooperation between the private sector, universities and research institutions remains limited amid weak institutional frameworks.
Sustainable economic growth and development cannot be achieved without innovation, which should become a policy priority. While this poses an immense challenge, transforming innovation from a barrier to an engine for development is essential to drive a sustained rise in living standards.
More in-depth analysis on this and other regional impediments to economic growth and development are available in the November Monthly Briefing on the World Economic Situation and Prospects.