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Ilanet.WorldBankr1.10 - 01 Aug 2015 - 15:01 - GregorioIvanoff

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Closing the Gap in Education and Technology

David de Ferranti, Guillermo E. Perry, Indermit Gill, J. Luis Guasch, Norbert Shady, Carolina Sanchez Paramo, William F. Maloney.

And as presented at the LACEA 2002 conference, October 11-12, 2002, Spain

Skills Upgrading and Innovation Policies

Brazil

An industrial power with the largest population in Latin America and the Caribbean, Brazil has made big strides in reducing social and economic inequality, which are both cause and consequence of the poverty that continues to afflict millions of people.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BRAZILEXTN/0,,menuPK:322347~pagePK:141159~piPK:141110~theSitePK:322341,00.html

Key Development Topics

The topics below, although approached from a regional perspective, are particularly relevant to Brazil. These websites will include information about reports or projects specific to the country.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/BRAZILEXTN/0,,menuPK:322372~pagePK:141132~piPK:148560~theSitePK:322341,00.html

Innovation

Identifying economic sectors in which the country has competitive advantage.

Innovation in Latin America & the Caribbean

As the global gap between knowledge-based and labor-based economies grows wider, many countries in the Latin America and Caribbean (LAC) region have found themselves on the losing end of the divide.

Why are so many LAC countries losing ground in the knowledge economy? Compared to the East Asian “tiger” countries (Hong Kong, Republic of Korea, Malaysia and Singapore), LAC countries’ workforce have less education, undertake less research and development, and produce fewer patents than these do – a mean of 0.8 patents per million people versus 54.4 per million people. These contrasts are crucial in a world in which technological innovation drives roughly one-half of economic growth.

The Bank explored the issue in a 2003 study, Closing the Gap in Education and Technology. Subsequently, the Office of the Chief Economist for Latin America & the Caribbean launched a series of studies on the development of intellectual capital in individual countries. Among the first nations examined are: Argentina, Brazil, Chile, Costa Rica, El Salvador and Mexico.

In the national studies, researchers looked at the same indicators examined in the Americas-wide project: patents granted, scientific articles published, investment in research and development, and the licensing of new foreign technologies. Results for each country were then compared with those for countries with the same size GDP and labor force and with the same level of merchandise exports to the United States. In all cases, the LAC countries have been devoting substantially less of their resources to technology and education than counterpart nations (though some of the countries in the region have kept pace with the trend of adopting foreign technologies).

World Bank research on innovation is not only aimed at studying the problem, but at finding solutions. As a first step, these country innovation studies identify economic sectors in which each country has a competitive advantage – for example, aircraft manufacturing for Brazil, mining for Chile, and stone, clay and glass manufacture for Costa Rica. Concentrating research and development activities in these fields would build on technological expertise that is already present. Researchers also found that demand for highly skilled workers is rising across the region – a trend that should propel LAC countries to make progress in closing the education-technology gap.

http://wbln0018.worldbank.org/LAC/LAC.nsf/ECADocByUnid/6FFA102604D57CF985256DC100663BDC?Opendocument

FINAL EDITION 2003: Closing the Gap in Education and Technology

http://lnweb18.worldbank.org/LAC/LAC.nsf/ECADocByUnid/93A351A1AB13BED185256C5C006B992B?Opendocument

Closing the Gap in Education and Technology

Investing in education, opening up to new technologies through foreign trade and investment, and encouraging private sector research and development (R&D) are the keys to unlocking the potential of technology to speed up economic growth in Latin America and the Caribbean (LAC).

In Closing the Gap in Education and Technology, principal authors David de Ferranti and Guillermo E. Perry advise Latin American and Caribbean governments to address the region's deficits in skills and technology, and thereby boost productivity, which is essential to improving growth prospects.

Between 1950 and 2000, per capita annual income in LAC doubled from $3,000 to $6,200. But in the OECD countries, per capita annual income tripled during the same period, from $7,300 to $23,000. During the same time period, the ratio of LAC's average income to the developed-country average fell from more than 40 percent in 1950 to about 25 percent in 2000

The report attributes this lag in Latin America's income growth to a "productivity gap" which, in turn, is caused by the region's failure to keep pace with adoption of new technologies in its production processes and slow skill upgrading.

To close this "productivity gap" in LAC, the report calls for a range of policy approaches and strategies, depending on a country's level of development. The Bank study identifies three progressive stages in a country's technological evolution — adoption, adaptation, and creation — and observes that policies should be designed to address the particular challenges that accompany each stage.

Countries at the "adoption stage", for example, where there are low levels of skilled labor and market competition, and few innovation-related institutions such as universities and research centers, the report recommends a focus on primary and secondary education coupled with an open trade policy. Countries that would benefit from such policies include Haiti, Guyana, Paraguay, Bolivia, Guatemala, Honduras, Ecuador and Nicaragua.

Countries at the "adaptation stage", such as Brazil, Colombia, Costa Rica, Peru, El Salvador, Panama and Venezuela, have more specialized skills needs. They are advised to meet these needs by providing incentives to private providers of advanced education, while sustaining state investment in primary and secondary schooling. They should also promote foreign direct investment, strengthen their information and communications technology sector, implement credible patent protection policies, establish competitive funding for private R&D and better links between universities, think tanks and firms.

Countries at the “creation stage” have been adapting technologies and selling resulting products at lower cost than their competitors, but which face challenges from new low-wage market entrants, need to make a leap forward into creating new products and processes. In LAC, countries moving in this direction are Chile, Mexico and, to some extent, Uruguay and Argentina. These countries, the report advises, need to continue expansion of higher education, sustain openness to trade and foreign direct investment, strengthen incentives for private-sector research and development and better integrate their National Innovation Systems.

In conclusion, the report argues that many LAC countries have been improving education and social risk management systems so that they are now ready to reap the rewards associated with forging stronger trade and technology ties with countries that are closer to world technology frontiers.

http://www.worldbank.org/

Countries & Regions

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html

Latin America and Caribbean

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/0,,menuPK:258559~pagePK:158889~piPK:146815~theSitePK:258554,00.html

http://www.worldbank.org/br

Em português: http://www.bancomundial.org.br

Office of the Chief Economist

http://lnweb18.worldbank.org/LAC/LAC.nsf/ECADocByLink/93A351A1AB13BED185256C5C006B992B?OpenDocument

RECENT PRESENTATIONS

http://lnweb18.worldbank.org/LAC/LAC.nsf/ECADocByUnid/DFE8E33EB4FB4FEA85256CEE00737C71?Opendocument

Innotavion in Latin America - Colombian Colloquium Harvard-MIT, Cambridge, November 2005 (566 K)