The Global Pursuit of Economic Innovation

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Revival of Industrial Policies: A Global Trend

The United Nations has reported that a revival of industrial policies is taking place worldwide, with countries focusing on technological innovation to diversify their economies. The World Intellectual Property Organization (WIPO), a UN agency, has highlighted the potential for greater productivity levels through specialization in existing strengths.

WIPO Chief Daren Tang stated, “In economies of all sizes, we are seeing a resurgence in industrial policymaking. This includes many developing and least developed countries, which are increasingly targeting economic diversification, innovation, creativity, and technology as means of securing supply chains, addressing national and international challenges, and driving sustainable growth.”

It is evident that more and more economies recognize the importance of innovation, creativity, technology, and entrepreneurship for their future development.

The Role of Industrial Policies: Strengthening National Innovation Systems

WIPO released its World Intellectual Property Report, a biennial publication aimed at assisting policymakers in making informed decisions by enhancing national innovation systems. The report focuses on the role of innovation in market economies and examines specific trends in intellectual property.

According to the report, the past few years have witnessed a resurgence of industrial policies driven by challenges like climate change and the COVID-19 pandemic.

Transforming Production Structure: Specialization and Productivity

The report emphasizes that countries and regions can achieve higher levels of productivity and innovation by specializing in their existing strengths. It suggests that economies grow by transforming their production structure from one dominated by low-tech, ubiquitous activities to one with rare outputs that rely more heavily on skilled human capital.

WIPO’s analysis, which includes nearly 40 million patent filings, over 70 million scientific papers, and economic activity worth more than $300 trillion in goods and services exports, reveals that innovative outcomes are highly concentrated. The top eight countries account for 50 percent of exports, 60 percent of scientific publications, and 80 percent of international patenting over the past 20 years.

Technological Diversification: Emerging Players

While the concentration of innovative outcomes has been dominated by a few countries, a shift is underway. WIPO highlights the significant increases in technological diversification in China, India, and South Korea over the last two decades.

China, for instance, has transformed from being specialized in only 16 percent to 94 percent of all technological capabilities. South Korea’s technological capabilities have increased from 40 percent to 83 percent, and India has seen its technological capabilities double from 9 percent to 21 percent.

Overall, the global revival of industrial policies reflects a growing recognition of the importance of innovation, creativity, and technology in driving economic diversification and sustainable growth. By specializing in their existing strengths, countries and regions can enhance productivity levels and foster a culture of innovation. The concentration of innovative outcomes among a few countries is gradually shifting, with emerging economies like China, India, and South Korea making significant strides in technological diversification. This trend signifies the potential for a more balanced and inclusive global innovation landscape in the future.

Source: The Manila Times

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