STILL MORE PAPERS ON K4D TOPICS

Financing Education: Investments and Returns: Analysis of the World Education Indicators 2002 Edition
From the Summary: “This volume is the third in a series of publications that seeks to analyse the education indicators developed through the OECD/UNESCO World Education Indicators (WEI) programme. The volume examines both the investments and returns to education and human capital. It begins by looking at the results of a specially commissioned study of the impact of human capital on economic growth in WEI countries which shows new findings relative to those found in studies of OECD Member states. It also sets out the context for trends in educational attainment as well as current levels of educational participation and expenditure in WEI countries. The report addresses the financing of education systems by examining spending and investment strategies in WEI countries from both public and private perspectives. It looks at the rationale for public spending, how public resources are distributed across levels of education and the role of the private sector both as a provider of educational services and a source of educational expenditure. A national statistical profile that sets out selected contextual and finance indicators against both OECD and WEI benchmarks, together with a comprehensive statistical annex covering both WEI and OECD countries, complements the analysis. The countries participating in the OECD/UNESCO WEI programme are: Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Jamaica, Jordan, Malaysia, Paraguay, Peru, the Philippines, the Russian Federation, Sri Lanka, Thailand, Tunisia, Uruguay and Zimbabwe.” February, 2002. (PDF, 232 pages.) This book can be browsed online, or purchased in hard copy or e-book format.

Designing Efficient Institutions for Science-Based Entrepreneurship: Lesson from the US and Sweden
Abstract: “The recent ‘scientification’ of commercial technology has brought the interface between universities and industry into sharp focus. In particular, academic entrepreneurship, i.e., the variety of ways in which academics take direct part in the commercialization of research, is widely discussed. The purpose of this paper is to suggest a framework for identifying the strategic individual decisions involved when educational choice is translated into science-based entrepreneurship. Identifying these decisions also allows us to hypothesize what incentive structures should be crucial. Our suggested framework is informally tested by an in-depth examination of the experiences of Sweden and the US. Despite large levels of R&D spending and comprehensive government support schemes, science-based entrepreneurship has been far less important in Sweden compared to the US. Our analysis points to weaknesses in the Swedish incentive structure in key respects: the rate of return to human capital investment, incentives to become an entrepreneur and to expand existing businesses, and insufficient incentives within the university system to adjust curricula and research budgets to outside demand. Several policy measures during the 1990s have reduced the weaknesses in the Swedish incentive structure. The current emergence of a more vibrant entrepreneurial culture in Sweden in some areas is consistent with these changes. Our analysis suggests that a policy aimed at encouraging science-based entrepreneurship should focus on strengthening individual incentives for human capital investment and entrepreneurial behavior both within universities and in business.” By Magnus Henrekson and Nathan Rosenberg, October 27, 2000. (PDF, 33 pages.)

The following papers are available from the United Nations University Institute for New Technologies (UNU/INTECH):


Deregulation, Entry of MNCs, Public technology procurement and Innovation capability in India's Telecommunications Equipment Industry
Abstract: “India has a sizeable telecom equipment manufacturing industry. The industry, which was originally dominated by just one state-owned corporation, has now been deregulated. Currently the industry consist of twelve SMEs, which manufacture small and medium switches and seven large firms (of which five are TNCs) manufacturing large switches). The country has a history of extreme dependence on foreign technology imports through essentially the licensing route to manufacture large switching equipment. These imported technologies were shown to be inappropriate to the usage pattern prevailing in the country. Consequent to this, considerable investments were effected through in -house R&D to adapt this inappropriate technology to local usage conditions. However some systematic efforts towards building up of local innovation capability through 'green field R&D projects' were initiated only around the mid-1980s. The paper defines innovation capability in telecoms equipment in terms of the ability to conceptualise, design, and manufacture state-of-the-art tecommunications equipment coupled with the ability to keep pace with important technological changes. This definition of innovation capability is operationalised in terms of an index of R&D. By taking three cases of telecoms technologies namely (a) main automatic local exchanges; (b) a Wireless in Local Loop access technology; and (c) telecom software exports, it is demonstrated that the country has a growing innovation capability in this sector. A survey of the various contributory factors identifies public procurement as the main instrument that has stimulated this activity. But with the opening of the telecoms carrier industry to private sector providers, this may become less of an effective instrument in the years to come.” By Sunil Mani, February 2003. (PDF 240 Kb)

Moving up or going back the Value Chain: An examination of the role of government with respect to promoting technological development in the Philippines
Abstract: “The Philippines is one of the leading exporters of high technology products from the developing world. However its production of these items is largely based on assembly of imported components. Affiliates of MNCs and small and medium local companies dominate the country's manufacturing sector. Successive governments have been grappling with the problems of moving up the value chain in the economic sense of the term or going back it in the technical sense. The paper undertakes a detailed review of the various policies and instruments put in place by various governmental agencies to hasten this process. Availability of adequate quantity of scientific manpower and financial schemes to encourage technology development at the enterprise-level are identified as the key factor inputs that are required for moving up the value chain. The analysis shows that the country has a serious shortage of scientists and engineers and there are also serious questions about its quality. Further technology financing schemes are insignificant and fragmented. Consequent to this the institutional support that is available for moving up the value chain in most high technology- intensive sectors is under some doubt.” By Sunil Mani, November 2002. (PDF, 446 KB)

Systemic Coordination and Human Capital Development: Knowledge Flows in Malaysia's MNC-Driven Electronics Clusters
Abstract: “Using two MNC dominated electronics clusters in Malaysia, this paper examines the development of human capital from two knowledge and skills acquisition modes - formal education and learning by performing - which were dominant in the successful evolution of industrial districts. Ineffective systemic coordination throughout the country from federal institutions has restricted the supply of high tech human capital from formal institutions of education and training. Hence, firms in Penang and Kelang Valley have faced growing demand-supply deficits. Restrictive immigration policies have hampered firms' options of seeking high tech human capital from abroad. Differential systemic coordination at the regional level has produced different levels of network synergies in Penang and Kelang Valley. Stronger systemic coordination and network cohesion has stimulated greater differentiation and division of labor, engendering the movement of tacit and experiential knowledge embodied in human capital to support industrial dynamism in Penang. Weak systemic coordination and network cohesion has confined MNCs to largely truncated operations without significant levels of differentiation and division of labor in the Kelang Valley.” By Rajah Rasiah, June 2002. (PDF, 299 KB)

Research Capacity Building in Nicaragua: From Partnership with Sweden to Ownership and Social Accountability
Abstract: “This paper analyses the Nicaragua-Sweden partnership to build research capacity in Nicaragua with support from SAREC (the research division of the Swedish International Development Agency). It looks at the history of this twenty-years old partnership and identifies the main outcomes and impacts, based on extensive quantitative and qualitative data collection from various sources. The main intention was to contribute to the direction of the future co-operation between Nicaragua and Sweden both at a local level and at the donor's (SAREC) level. The paper, however, attempts to go further beyond a case study by proposing and developing a general argument. This is that modalities of support to research capacity building in the South need to move from old assumptions concerning knowledge production, utilisation and the nature of development. In order to develop such argument, the paper unveils and discusses the assumptions underlying SAREC's modality of support to Nicaragua and points out their limitations. It finishes by suggesting new assumptions to be taken into account when designing modalities of support to research capacity building, as follows: i) the notion of innovation as a non-linear process involving different stakeholders and forms of knowledge; ii) the need for social relevance and accountability; iii) the idea of self-determination and local ownership.” By Léa Velho, October 2002. (PDF, 341 KB)

R&D in the Public and Private Sector in Brazil: Complements or Substitutes?
Abstract: “The purpose of this paper is to analyse the evolution of the relations between the Brazilian public research sector, particularly the universities, and the productive sector as stimulated, directly or indirectly, by government policies from the 70's up to the present days. Special emphasis is given to the schemes devised by the Ministry of Science and Technology, which was created in 1985. The argument we want to develop is that government actions to bring universities and enterprises closer together may have succeeded in doing so for the duration of a specific project, but were unable to create long-lasting links. The role of university research as complementary to, and not substitute for, industrial research is emphasised in a number of recent studies on innovation, as outlined in the first section. Then, we proceed to the analysis of the evolution of the relations between the public sector research and industry in Brazil. We start with a sketch of the industrialisation by import substitution model adopted in Brazil, highlighting the role played in it by local R&D, when the country was under military rule. Next we tackle the changes in those relations as the country reoriented its development model with the return to democratic regime in 1985. The Ministry of Science and Technology, created in that year, has since then devised and implemented a number of schemes to foster links between public sector research and enterprises. The most significant of those schemes are presented and their results are analysed. We conclude by saying that government actions to stimulate private investment in R&D as well as fostering links between enterprises and public sector research had a very limited success.” By Lea Velho and Tirso W. Saenz, July 2002. (PDF, 315 KB)

What is the 'Knowledge Economy'? Knowledge Intensity and Distributed Knowledge Bases
Abstract: “In recent years public policies for science, technology and innovation have attracted increased attention as a result of claims that knowledge-intensive industries are now at the core of growth, and that we are now entering a completely new form of 'knowledge society'. The objectives of this paper are firstly to examine what various authors mean by the concept of a knowledge economy or learning economy; secondly to describe quantitatively the creation and use of knowledge across industries; thirdly to develop an approach to understanding the knowledge intensity of mature, 'traditional' or low-technology industries. In exploring this issue, the paper first uses Community Innovation Survey data to describe some empirical dimensions of knowledge creation in Europe. It shows that knowledge investments are economy wide, not confined to high-tech sectors, and not confined to R&D. The paper then turns to concepts and a methodology for mapping the knowledge base of an economic activity. The aim is to generate a more nuanced understanding of the meaning of 'knowledge intensity' in production. The approach rests on what the paper terms 'distributed knowledge bases' that have a systemic and institutionally diffuse location. Knowledge for many key activities is distributed among agents, institutions and knowledge fields, and the problem is to understand the embodied and disembodied knowledge flows between them. An empirical example of such knowledge bases is described, for the food processing industry. The paper concludes by discussing how such 'distributed knowledge bases' might affect our conceptions of the knowledge economy and suggests links to current policy challenges in both developed and developing economies.” By Keith Smith, June 2002. (PDF 227, KB)

Internet Access in Africa: An Empirical Exploration
Abstract: “Using empirical and new field data, this exploratory study investigates the pattern of adoption of constraints to the use of the Internet in Africa. Cross country exercise using regression shows that Internet use is constrained by structural as well as cost-related factors. Field data from interviews of over two hundred academics in ten universities in Kenya and Nigeria confirmed much of the aggregate country level findings. Our study found that initial investment cost of end-user equipment limits the ownership of PCs, compelling academics to seek Internet access in cyber cafes and other public places.” By Banji Oyelaran-Oyeyinka and Catherine Nyaki Adeya, May 2002. (PDF, 294 KB)

Institutional Support for Investment in New Technologies: The Role of Venture Capital Institutions in Developing Countries
Abstract: “An important component of this institutional framework supporting investment in new technologies is venture capital institutions. A group of developing countries, especially from Asia has been rather successful in establishing and nurturing this way of financing new technologies. The present paper attempts to survey the efforts of these countries towards using venture capital institutions as financiers of new technologies. In specific terms, the paper, based essentially on secondary source material, maps out the ways in which these countries have gone about promoting venture capital based new technology firms. In addition, we analyse the VC investments in these countries in terms of stage, technology and source. The paper also develops an index of venture capital development across the selected developing countries. The index allows the ranking of the VC industry in any particular country according to its level of development.” By Sunil Mani and Anthony Bartzokas, May 2002. (PDF, 308 KB)

Manufacturing Response in a National System of Innovation: Evidence from the Brewing Firms in Nigeria
Abstract: “Employing empirical data, this study examines the innovation response of private Nigerian brewing firms to a state-induced crisis. We found that size, ownership, manufacturing skills, and technical affiliation were decisive factors in the innovation success of firms that survived and prospered under a decidedly turbulent industrial environment. State action, which was equally decisive but measured and based on scientific evidence, was accompanied by appropriate incentives and penalties. Firms with superior innovative performance recorded strong economic performance. The large firms with strong technical and financial support from foreign partners were able to tap into wider knowledge bases locally and broad and subsequently prospered.” By Banji Oyelaran-Oyeyinka, April 2002. (PDF, 317 KB)

Prospects for the Digital Economy in South Africa: Technology, Policy, People, and Strategies
Abstract: ”This chapter explores the on-going development of a global digital economy through a case-study analysis of its impact on and prospects in South Africa. It argues that four factors are key to understanding the impact of the digital economy on a developing country: (1) the level of technology, including its information and communications infrastructure and system of production and distribution; (2) the policy and regulatory framework and initiatives; (3) the human capacity and income distribution; and (4) the strategic approach of the state in response to dramatic global and domestic processes. The chapter explores these four factors in the Republic of South Africa, with a focus on the period 1995-2000. Data for the study are drawn from survey research, published reports from national and international bodies, scholarly journals, structured interviews, and participant observation. Key findings of the study are as follows: an insufficient information and communications infrastructure remains a barrier to growth of the information economy in South Africa, especially in peri-urban and rural areas; awareness of the importance of the information economy is growing, but current human resources and development strategies are insufficient to meet human capital requirements; significant efforts have been made in order to re-orient the South African policy environment into one supportive of growth in a global digital economy; and South Africa's role as a leading African and developing world economy places additional burdens on its need to engage in regional, and global policy formulation activities in support of the emergence of a new regime for global e-commerce that is supportive of the strategic goals of the developing world.” By Derrick L. Cogburn & Catherine Nyaki Adeya, April 2002. (PDF. 250 KB)

Government, Innovation and Technology Policy, An Analysis of the Brazilian Experience during the 1990s
Abstract: “The purpose of this paper is to survey the various ways through which the Brazilian state has intervened in the area of technology development at the enterprise level. Government intervention in technology development has manifested itself in terms of four areas: First it had placed restrictions on the import of foreign technology, but most of these restrictions were removed or diluted as part of the liberalisation strategy of the 1990s. Consequently the cost of purchasing disembodied technology has registered some significant increases during the post-liberalisation phase. Second, it has initiated a number of schemes through which domestic technology development is financed. In terms of instruments, these can be classified into loans and grants, tax incentives and venture capital. Third, the state has intervened to create an adequate supply of extremely well-trained scientific manpower. While there appears to be no supply bottlenecks, the demand for scientists and engineers appears to be very low. The very low density of scientists and engineers indicates this. Finally the Ministério da Ciência e Tecnologia (MCT), the main administrative agency responsible for innovation policy, seems to be aware of the problems faced by the innovation system in the country. It is in the process of giving shape to a new policy on innovation, has introduced new research grants, etc., but it has not addressed itself to the fundamental weakness of the innovation system, namely the low density of scientists and engineers in the country.” By Sunil Mani, December 2001. (PDF, 305 KB)

Innovation Systems, Institutional Change and the New Knowledge Market: Implications for Third World Agricultural Development
Abstract: “This paper uses a simplified version of classical information theory to improve understanding of the dynamic potential of innovation systems in developing countries with a special focus on issues of agricultural poverty. Using examples drawn from emergent knowledge markets in industrialised countries, the paper suggests that such an analytical approach focuses attention directly on the types of institutional reforms necessary to improve the effectiveness of Third World agricultural R&D. Contrast is made with more conventional approaches that take institutional structures as given and focus more on factors such as price regimes, policy weaknesses and political will. The paper argues that so great now are the problems in this area (particularly in Sub-Saharan Africa) that there is a clear need for institutional reform to accompany relevant technological changes. In the absence of such reform innovative (and hence economic) potential is likely to be compromised.” By Norman Clark, December 2001. (PDF 257, Kb)

Working with the Market: The Israeli Experience of Promoting R&D in the Enterprise Sector and the Lessons for Developing Countries
Abstract: “The purpose of this Paper is to analyse the various ways in which the Israeli Government is supporting R&D in industry and draw some lessons from this experience for Developing Countries. The Israeli experience is rather unique in the sense that it uses mainly one financial instrument, namely the research grants scheme implemented by the Office of the Chief Scientist (OCS). The effectiveness of this scheme in raising the nature of and extent of innovative activity in the country has been the subject of a very lively and informed debate in Israel. In this Discussion Paper I not only take stock of this debate but also subject it to a detailed empirical scrutiny. There are two basic conclusions. The phenomenal growth of the Venture Capital (VC) industry (originally promoted by the state) is now becoming a competitor to the research grant scheme. But the main lesson for Developing Countries is the fact that it is the adequate supply of high-quality human resource that has played a part in making the research grant scheme a successful instrument. The research grant scheme is thus an effective way for the state to work with the market in promoting innovations in enterprises.” By Sunil Mani, December 2001. (PDF, 257 KB)

Conditions for Successful Technology Policy in Developing Countries - Learning Rents, State Structures, and Institutions
Abstract: “The paper develops an analysis of the economic, political, and institutional conditions for successful design and implementation of technology policy in developing countries. After a brief introduction (section 1), we discuss contending economic theories of technological change and technology policy (section 2). It is concluded that, despite many pro-market arguments, market imperfections inherent in the process of technological change make the creation of learning and innovation rents by the state potentially very beneficial, especially in developing countries. The next section (section 3) analyses the political and institutional factors that determine how effectively such rents can be created and managed. Then we discuss how the scope of technology policy in developing countries is affected by the recent changes in domestic and international policy contexts such as domestic deregulation and the emergence of a "liberal" world order represented by the WTO (section 4). The paper ends with a brief conclusion (section 5).” By Ha-Joon Chang and Ali Cheema, December 2001. (PDF, 325 KB)

Technological Change and Corporate Strategies in the Fertiliser Industry
Abstract: “A major restructuring process is taking place in the international fertiliser industry driven by the introduction of stricter environmental regulation in Advanced Countries and the expansion of local production capabilities in Developing Countries. The paper will analyse patterns of corporate adjustment in the fertiliser industry. The emphasis is on the unique characteristics of the fertiliser industry as the producer of a final product and a supplier of intermediate inputs to agriculture. These producer-user linkages will be examined in the context of Advanced and Developing Countries. It will be argued that the fertiliser industry has incorporated the specific characteristics of these linkages in its adjustment processes in both Developed and Developing Countries - but in very different ways. This analysis suggests significant implications for the design of policies, which could facilitate the introduction of cleaner production techniques in the fertiliser industry and the adoption of environmental-friendly production techniques in agriculture.” By Anthony Bartzokas, October 2001. (PDF, 286 KB)

A Framework for Policy-Oriented Innovation Studies in Industrialising Countries
Abstract: “This paper argues that there is increasing need for the integration of policy considerations in the formulation of research questions and in the development of analytical work in policy-oriented innovation studies. Despite the fact that Evolutionary and Innovation Studies theories have offered new ways of incorporating policy, little explicitness in this regard has yet been achieved and there is a risk that academic research following the new perspectives will be of little relevance for policy. Rather than a 'linear process' starting with empirical research aimed at linking competitiveness and economic performance to technological capabilities (in a comparative perspective and aimed at identifying 'best practice'), followed by very abstract and un-grounded 'policy implications', a new type of link between positive and normative economics in the field is required. Our approach suggests a new structure for policy-oriented and policy-relevant research, i.e. the integration of research on technological change and industrial transformation, with research on policy and the development of a conceptual framework for the design and implementation of innovation policies.” By Anthony Bartzokas and Morris Teubal, September 2001. (PDF, 286 KB)

Networks and Linkages in African Manufacturing Cluster: A Nigerian Case Study
Abstract: “Employing survey data, this paper investigates the basis for long-term sustainable development of industrial clusters in Lagos, Nigeria. We compare these metropolitan clusters with the Nnewi cluster, located within a rural setting in a homogeneous ethnic community. The characteristics of clustering examined are: the forms and intensity of inter-firm linkages, including the formation of trade networks, and the role of business associations. We found a significant level of collaboration among firms in sharing utilities and modest forms of subcontracting non-core activities among Lagos firms, but this is less so at Nnewi. The Lagos clusters have relatively high proportions of educated manpower but this important asset is underemployed in a situation of low grow rate of demand for quality products. The firms at Nnewi on the other hand are owned by seem-illiterates who came from trading backgrounds into manufacturing. Networks such as Industry associations are playing vital roles as information providers and as links into the global market although the benefits are yet to fully manifest. Ethnic and kinship ties play a prominent role at Nnewi while social networks and non-family ties are more important in the Lagos clusters. This study suggests that non-economic factors exert profound influence on the evolving forms industrial organisations in late industrialisation.” Bb Banji Oyelaran-Oyeyinka, September 2001. (PDF, 297 KB)

Financial Markets and Technological Change: Patterns of Technological and Financial Decisions by Manufacturing Firms in Southern Europe
Abstract: “In this paper we suggest that technological acquisition and innovation by firms involve new investment, and thus require a financial decision as well as a technological one. The level of analysis is the southern European countries and the impact of the European integration process on sectoral innovation and industrial restructuring processes. The paper suggests that technological development goes beyond incentives for technological investment projects. It depends on the quality of investment decisions and in the long run on the profitability of these projects. In consequence, as the structure and behaviour of the capital market strongly affects investment decisions, it will also affect technological development.” By Anthony Bartzokas, August 2001. (PDF, 208 KB)

Role of Government in Promoting Innovation in the Enterprise Sector An Analysis of the Indian Experience
Abstract: “The purpose of the paper is to analyse the role of the Indian state in promoting innovations in enterprise or manufacturing sector. The country's manufacturing sector is dominated by the Chemicals and pharmaceutical sector which also accounts for the largest share in R&D investments and in the number of patents granted. The paper begins by mapping out the broad external environment within which innovative activities of firms are encouraged. This environment consists of a series of policies. A detailed analysis of them showed that policies lack specificity in targets, the time dimension and budget. Four possible dimensions of the innovation system are considered, namely the (a) policies with respect to the supply of technically trained human resource for R&D; (b) the physical technological infrastructure; (c) fiscal incentives for encouraging innovation; and (d) promotion of technology-based ventures through venture capital funds. The country suffers from a chronic shortage of research scientists and engineers of the type that is required for R&D. The basic cause of this could be traced to the quality of science and engineering education in the country and to the ever-increasing brain drain. A network of government research institutes, which have been undergoing a major restructuring, specifically since 1996, dominates the physical technological infrastructure. However they continue to depend upon governmental grants and projects for their sustenance and their interaction with the domestic manufacturing sector is very limited. India does not have any major research grant schemes and even the one that it has, in actual operation, is directed largely at public sector enterprises. Most of the schemes are research loan schemes. In other words the extent of public subsidies for private sector R&D is quite low in the country. The country has a variety of direct and indirect tax incentives for R&D. However both a macro and micro exercise revealed that most enterprises do not perceive its existence as important. In most cases the level of R&D performed would be the same even in the absence of direct tax incentives. Finally an examination of the operation of venture capital funds showed that they conform to the ideal model of providing, by and large, equity support to technology-based ventures in their early stages. The paper also makes some critical comments on the quality of India's R&D statistics and makes suggestions for their improvement.” By Sunil Mani, April 2001. (PDF, 390 KB)

Government and Innovation Policy An Analysis of the South African Experience since 1994
Abstract: “South Africa used to follow a policy of import substitution, necessitated by subscription to apartheid. However, following the democratic elections of 1994, the country abandoned this policy and put in place a whole host of measures to increase its industrial competitiveness. Policy makers gave specific attention to achieving this goal through technological development. The country has shown considerable sophistication in framing the necessary policies and institutions to hasten this process of domestic technology development coupled with a better absorption of imported technologies. However, South Africa has not shown as much sophistication in implementing and evaluating these otherwise laudable policies. For instance, a significant number of research grants have been made available to its innovation system comprising the higher education sector, the science, engineering and technology institutions(SETIs) and the business enterprise sector. But this has not resulted in desirable results, as the R&D intensity and the number of patented innovations continues to be low. An analysis of the real weaknesses of the innovation system shows that the country suffers from a severe shortage of scientists and engineers who can engage in R&D. The reason for this is a near stagnant enrolment in science and engineering subjects and possibly migration abroad. Without addressing this basic lacuna in its innovation system, the country has put in place three sizeable research grants. Given the limited number of researchers, these research grants run the risk of "crowding" themselves out. Thus the South African case once again confirms our hypothesis that countries may not be successful in stimulating R&D in their enterprise sectors by merely fine-tuning financial instruments such as research grants and tax incentives. For financial instruments to be very effective, there has to be a critical mass of research scientists and engineers.” By Sunil Mani, February 2001. (PDF, 301 KB)

Do the Least Developed Countries need Science and Technology for Sustainable Development?
By Lynn Mytelka, Prepared for the Third UN Conference on Least Developed Countries, Round Table: "Education for All and Sustainable Development in LDCs" 16 May, 2001. (PDF, 6 pages.)

K4D PUBLICATIONS OF THE OECD

These are all publications of the OECD, dealing with innovation systems and or technology innovation. These books can be browsed online, or may be purchased in hard copy. Some can be purchased as e-books, and most are is available in French as well as English.

Technology and Poverty Reduction in Asia and the Pacific
Summary: “Poverty reduction remains a major development challenge in much of Asia and the Pacific. Historically, technology has played a central role in raising living standards across the region, including those of the poor. The Green Revolution and various innovations of modern medicine and public health have been instrumental in improving nutrition, health, and livelihoods of millions of poor people. Yet, the pace of improvement from these sources appears to have slowed, and new technological impetus — as well as improved policies and institutions — are needed to address the persistent poverty problem in some regions and among some social groups. Agricultural and medical biotechnology hold tremendous promise but also bring with them new risks and concerns that need to be addressed before their full potential can be realized. New information technologies are only beginning to diffuse widely in developing Asia and the Pacific, but ultimately these too can have profound impacts on the lives of the poor, empowering them with access to information that once was the preserve of the privileged few.” By Jorge Braga de Macedo, Tadao Chino, Jun-2002. (PDF, 225 pages.)

Dynamising National Innovation Systems
Summary: “Promoting innovation requires innovative government policy. Innovation through the creation, diffusion and use of knowledge has become a key driver of economic growth and provides part of the response to many new societal challenges. However, the determinants of innovation performance have changed in a globalising, knowledge-based economy. Government policy to boost innovation performance must be adapted accordingly, based on a sound conceptual framework. Synthesising the results of a multi-year OECD project on national innovation systems (NIS), this publication demonstrates how the NIS approach can be implemented in designing and implementing more efficient technology and innovation policies.” May, 2002. (PDF, 100 pages.)

Using Knowledge for Development The Brazilian Experience
Summary: “This book looks at Brazil’s recent experience in using knowledge for development. It examines the major barriers confronting the country in its transition towards a knowledge-based economy, and presents elements of a viable strategy which would allow it to step confidently into the future. However, while Brazil has tremendous strengths and the ability to take immense strides forward in the medium term, there are formidable challenges which need to be faced. The country continues to be plagued by a number of weaknesses, hampering its potential for economic, technological and social development. The report argues that Brazil needs to put in place a more comprehensive policy framework for the broad diffusion of knowledge.The Brazilian innovation system and the productivity of research need to be strengthened, while the policy frameworks which are key for disseminating the outcomes of research throughout society as a whole need reinforcing. These reforms should be carried out in such a way that they help build effective links to industrial activity and lead to the creation of marketable products.” Dec-2001. (PDF, 80 pages)

Bridging the Innovation Gap in Russia: The Helsinki Seminar
Summary: “Despite substantial achievements in the recent past, the innovation climate in Russia is in need of major improvements. Comprehensive institutional and policy reforms are required, including in areas outside the remit of policy makers in technology and innovation. In this context, the Helsinki Seminar on "Innovation Policy and the Valorisation of Science and Technology in Russia" gathered government officials, scientists and businessmen from Russia and several OECD Member and observer countries -- Canada, France, Germany, the United Kingdom, Hungary, Italy, Korea, the United States and Israel -- as well as from countries of the Newly Independent States (NIS). Participants examined the climate for innovation in Russia and discussed the lessons that can be drawn from the institutional reforms and recent policy initiatives in OECD countries to enhance the contribution of science and technology to innovation and growth.” March 2001. (PDF, 96 pages)

Innovative People Mobility of Skilled Personnel in National Innovation Systems
Summary: “The mobility of qualified labour, between and among the public and private sectors, is a vital mechanism for diffusing tacit knowledge within local, national and global innovation systems. Based on new empirical evidence, this publication compares the rates and patterns of mobility of high-skilled labour in a sample of OECD countries. It also documents the rapid internationalisation of this form of knowledge flows and provides guidance for the improvement of internationally comparable statististics in this area.” October 2001. (PDF, 308 pages.)

Innovative Networks Co-operation in National Innovation Systems
Summary: “This book analyses the role of networks in innovation and technology diffusion. It reviews policy initiatives to promote efficient networking in selected OECD countries, and draws the main implications for public policy. It provides both fresh conceptual insights and new factual information on this important mechanism of innovation-led growth.” October 2001. (PDF, 340 pages.)

The New Economy: Beyond the Hype The OECD Growth Project
Summary: “In 2000 commentators everywhere were hailing the boom in some western economies as the dawn of a new economy. In 2001, with a slowdown biting in the US economy, dot.coms folding and information and communications technology firms feeling the pinch globally, the headline writers have swung the other way, saying that it was all a myth. Was it? The New Economy: Beyond the Hype, looks past the elation and gloom to help policymakers think and act with the facts. It explores the causes of the discrepancy in economic performance in the OECD area. It shows that while technology has had a pervasive and profound effect on economies and societies, it alone was not the reason for fast growth. What counts more is how that technology is put to work. The book argues forcefully that whatever the outlook for the business cycle, we are now faced with a new economic environment. It urges policymakers to adopt a comprehensive growth strategy combining five policy areas that can engage ICT, human capital, innovation and entrepreneurship in the growth process alongside policies to mobilise labour and increase investment for the long term. Naturally, good fundamentals -- macroeconomic stability, openness and competition, as well as sound economic and social institutions, and proper social protection -- are a prerequisite for success.” August 2001. (PDF, 64 pages.)

Information and Communication Technologies and Rural DevelopmentSummary: “Information and Communication Technologies (ICTs) introduce a new relationship between time and space. Do the nascent possibilities of tele-work, distant access to public services and e-commerce offer both realistic and innovating perspectives for rural development? Are ICTs a threat rather than an opportunity for rural areas? Will these technologies increase the attractiveness of rural and remote areas or will they reinforce the influence of urban ones? ICTs and Rural Development sets out to answer these questions. Field research conducted in Canada, France, Ireland, the United Kingdom and the United States shows that rural development projects organised around ICTs have facilitated job creation as well as the emergence of a new environment favourable to the development of the community. Nonetheless, the success of such projects depends on a number of conditions. They are presented and analysed in this report.” July 2001. (PDF, 150 pages.)

Innovative Clusters Drivers of National Innovation Systems
Summary: “The growth potential of countries increasingly depends on the effectiveness of their innovation systems in creating, diffusing and using knowledge. A large share of market-based or informal knowledge flows occur within industrial clusters that can be seen as reduced-form innovation systems. Policies to stimulate innovation at national and local levels must both build on and contribute to the dynamics of innovative clusters. This book presents a series of papers written by policy makers and academic experts in the field, that demonstrate why and how this can be done in different national contexts. Edited by: Pim den Hertog of Dialogic, Utrecht, Netherlands; Edward M. Bergman of the Vienna University of Economics and Business Administration, Austria; David Charles of the Center for Urban and Regional Development Studies in Newcastle, UK.” June, 2001. (PDF, 420 pages.)

OECD Proceedings: Social Sciences and Innovation
Summary: “What is the contribution of the social sciences to improving our understanding of social and technological innovation processes? How can they help to overcome some of the barriers to technological and social innovation and improve the management of innovation by limiting the negative side-effects of new technologies and social change? And how can social and technological innovations contribute to the better functioning of social science? These were some of the questions tackled at the Tokyo Workshop on Social Sciences and Innovation which brought together high-level experts and policy makers from the OECD countries as well as from Asia, Africa and South America to discuss the role of the social sciences in fostering innovation.” 232 pages, June 2001.

THE FOOD AND AGRICULTURE ORGANIZATION (FAO) STATE OF THE WORLD REPORTS

This website provides the FAO's major period reports on "The State of Food and Agriculture" (annual), "The State of World Fisheries and Aquaculture" (biennial). "The State of World Forests" (biennial), and "The State of Food Insecurity in the World" (annual). The reports are available in English, French and Spanish.

MISCELLANEOUS PAPERS FOUND ON THE WEB

Here are a few miscellaneous papers relating to K4D. They are all things I found looking for materials on the role of science and technology, and information and communications technology specifically, on economic growth and poverty reduction.

New Technologies, Competitiveness, and Poverty Reduction
From the Conclusions: “This overview of technological trends in manufactured exports and their drivers provides a useful lens through which to view growth. It is not suggested that growth is the only factor in poverty alleviation, but it clearly is an important one. Without boosting growth it is difficult to reduce poverty on a sustained basis. And in a liberalized world with inexorable technical progress, it is difficult for most countries to have growth without building industrial competitiveness. The picture has an optimistic and a pessimistic side. The optimistic side is that it is possible for developing countries to grow and compete effectively in the emerging setting, entering competitive markets for manufactures and moving up the technology scale quickly. The pessimistic side is that the trend is toward increasing divergence rather than convergence. The globalization process is drawing apart the “insiders” and the “outsiders” to technological dynamism. A few countries on the “inside” are participating in integrated international production systems. Of these, the truly dynamic ones are those that have developed strong local technological capabilities; the other insiders need to follow their example by investing in human and technological capital. Other developing countries are “on the outside” to different extents, from some about to join the insiders on one end to those risking long-term marginalization on the other.” By Sanjaya Lall, 2001. (PDF, 14 pages.)

Use of Information Technology for Poverty Reduction: A Focus on Andhra Pradesh
Conclusion: "An attempt has been made in this paper to present the approach adopted by the state of Andhra Pradesh in using IT for addressing the problem of poverty. The state has taken up a range of initiatives for using IT for improving governance and leapfrogging in terms of development. Past approaches have tended to focus on the primacy of the agricultural sector for escaping from the poverty trap. However, Andhra Pradesh views IT as offering a new paradigm of development very different from conventional approaches. In today's fast changing world, the transition from the past to the future is not a smooth continuum. Consequently, traditional approaches to deal with issues like poverty may have to be abandoned. It would be worthwhile to think out-of-the-box, look at new opportunities emerging in a networked world, and create a radically different model of development basing on these opportunities. While the traditional sectors like agriculture cannot be ignored, the new opportunities driven by IT, cannot be missed." By Randeep Sudan, 2001. (PDF, 86 pages)

Impacts of Food Crop Improvement Research in Africa
From the Abstract: “In recent years, an increasing number of studies have been undertaken to document agricultural research impacts and estimate rates of returns (RORs) to agricultural research investment in Sub-Saharan Africa (SSA). These studies provide tangible evidence of the increasing availability of improved varieties of major food crops to farmers in Africa, increased food production in regions where adoption has occurred, and positive returns to research investment. The widespread adoption of improved maize, wheat and rice varieties is especially noteworthy, with more than 50% of the area planted under these improved cereal crops by the early 1990s. The growing body of evidence on the impacts of agricultural research in Africa indicate that agricultural research in Africa has had productivity-increasing impacts. ….However, it should be noted that the results are patchy or uneven, by country and over time. The results also reflect wide variability as a result of differences in agroclimatic factors and the policy environment. Furthermore, the increasing availability of improved varieties is a necessary but not sufficient condition for increasing agricultural productivity. By Mywish Maredia, Derek Byerlee and Peter Pee, December 1998. (PDF, 42 pages)

WHO Health Research System Analysis Initiative: Brief Overview
From the Summary: “This framework serves as the basis for operational description and analysis of national health research from a system's perspective, rather than from a sector perspective…..Results documenting the benefits of health research and identifying the most effective processes to produce and utilize health research for improved health and health equity, will be especially sought. These findings will clearly serve as an input to the World Health Report 2004, as well as to concrete, longer-term technical cooperation with countries to strengthen national health research systems well beyond the publication of the WHR 2004.”

Neoclassical Growth, Manufacturing Agglomeration and Terms of Trade
Abstract: "This paper presents an integrated view of economic growth, development traps, and economic geography. We explain why there is income convergence among some countries (neoclassical regime) and income divergence among others (poverty trap regime). Income convergence (divergence) and manufacturing industry diffusion (agglomeration) are re-enforcing each other in a cumulative process. Moreover, trade openness may trigger a catch-up process of an economy that is stuck in a 'poverty trap'. This catch-up is characterized by an increase in the investment-to-GDP ratio and an improvement of the terms of trade. A new dynamic welfare gain of trade liberalization is identified, which is likely to be large." By Dieter M Urban, March 2000. (PDF, 470kb)

Moving Skills from Hands to Heads: Import of Technology and Export Performance
Abstract: “This paper examines the link between imported technologies and a country’s export performance, as measured by product quality. The analysis is set in the background of the process of regional integration between the EU and its neighbouring developing countries. The underlying question is whether trade integration fosters or dampens learning and technological upgrading. We find that unit values of exports from these countries to the EU rose steadily between 1988 and 1996, relative to the unit values of world exports to Europe. If increases in unit values satisfactorily proxy increases in product quality, then trade integration has fostered product upgrading and technological learning in the sample countries. We find that imported technologies and other sources of knowledge have a strong bearing on this pattern. Technological inflows are captured by the degree of involvement of European companies in export flows from our sample countries (Outward Processing Trade) and by the skill content of the machines imported.” By Giorgio Barba Navaretti, Eni Enrico Mattei, Marzio Galeotti, and Andrea Mattozzi, June 2000. (PDF, 390KB)

RAND PUBLICATIONS ON S&T AND ICTS

The RAND Corporation, a Think Tank, has a number of publications that are relevant to this Blog. A number of titles are given below, and all the papers can be downloaded from this site:


Information and Communication Technology Reports
Citizens, Computers, and Connectivity: A Review of Trends
The Earth Below: Purchasing Science Data and the Role of Public-Private Partnership
The Future of the Information Revolution in Europe: Proceedings of an International Conference
The Future of the Information Revolution in Latin America: Proceedings of an International Conference
The Global Course of the Information Revolution: Political, Economic, and Social Consequences
The Global Course of the Information Revolution: Technological Trends: Proceedings of an International Conference
The Information Age and the Printing Press: Looking Backward to See Ahead
The Information Revolution in the Middle East and North Africa
Information Technology in the Home: Barriers, Opportunities, and Research Directions
International Agreements on Cooperation in Remote Sensing and Earth Observation
Issues Affecting Internet Use in Afghanistan and Developing Countries in the Middle East
Lessons for the Global Spatial Data Infrastructure: International Case Study Analysis
Who Runs What in the Global Information Grid? Ways to Show Local and Global Responsibility
The Zapatista "Social Netwar" in Mexico

Science and Technology Reports
Discovery and Innovation: Federal Research and Development Activities in the Fifty States, District of Columbia, and Puerto Rico
Global Science and Technology Information: A New Spin on Access
Information and Biological Revolutions: Global Governance Challenges--Summary of a Study Group
International Cooperation in Research and Development: An Inventory of U.S. Government Spending and a Framework for Measuring Benefits
International Cooperation in Research and Development
International Cooperation in Research and Development: An Update to an Inventory of U.S. Government Spending
Linking Effectively: International Cooperation in Science and Technology
New Methods for Robust Science and Technology Planning
Science and Technology Collaboration: Building Capacity in Developing Countries
U.S. Government Funding for Science and Technology Cooperation with Russia
Vision of the Future of Scientific Research: Focal Points for Policy -- Main Report

Innovation Systems Reports
Building a New Foundation for Innovation: Results of a Workshop for the National Science Foundation
New Forces at Work: Industry Views Critical Technologies
New Foundations for Growth: The U.S. Innovation System Today and Tomorrow
New Foundations for Growth: The U.S. Innovation System Today and Tomorrow--An Executive Summary
The Role of Technical Standards in Today's Society and in the Future
Scaffolding the New Web: Standards and Standards Policy for the Digital Economy

E-Learning Reports
Elements of a National Strategy to Foster Effective Use of Technololgy in Elementary and Secondary Education
Focus on Generic Skills for Information Technology Literacy
Surplus Federal Computers for Schools: An Assessment of the Early Implementation of E.O. 12999
Will the Internet Transform Higher Education

Alternatives for Landmine Detection

We all know that landmines are a real problem, killing and maiming far to many children and adults each year. New technologies are desperately needed to help in the removal of landmines. There is a major role for ICT in this effort, and indeed one can frame important aspects of the landmine problem as Knowledge for Development issues. The following is a RAMD study that discusses some of the ICT challenges and opportunities.

Alternatives for Landmine Detection
Abstract: "At the rate that government and nongovernmental organizations are clearing existing landmines, it will take 450-500 years to rid the world of them. Concerned about the slow pace of demining, the Office of Science and Technology asked RAND to assess potential innovative technologies being explored and to project what funding would be required to foster the development of the more promising ones. The authors of this report suggest that the federal government undertake a research and development effort to develop a multisensor mine detection system over the next five to eight years." By Jacqueline MacDonald, J. R. Lockwood, John McFee, Thomas Altshuler, Thomas Broach, Lawrence Carin, Russell Harmon, Carey Rappaport, Waymond Scott, and Richard Weaver, 2003. (350 pages.)
http://www.rand.org/publications/MR/MR1608/index.html

SUSTAINABILITY

I have been corresponding with Michel Menou about the sustainability of telecenters, and chatting with Tod Bruning about sustainability of small ICT projects in Africa. We three seem to agree that the concept is often and greatly misused.

I suppose that the Earth Summit in Rio in 1992 marked some kind of milestone in the popularization of the term, as did the WSSD last year. The emphasis in those contexts was of course, environmental sustainability – a course of social and economic development that did not cause too much environmental degradation.

“Sustainability” in the ICT for Development context seems to be more often used in the context of financial sustainability – some infrastructure or application that generates enough income to be operated over time, or indeed often narrowly defined as to be self supporting from such income. Of course, public goods are just those that must be subsidized because the social benefits are greater than the cost of production, while the income generated from the sale of the goods is less than their cost of production. It is unfortunate (but interesting) to see people criticize organizations that produce public goods because they are not self-supporting without subsidies.

Of course there are lots of other kinds of sustainability – economic, administrative, social, bureaucratic, etc. And of course a lot of these concepts are misused. Lets look at some situations in which the concept “sustainability” is applies, and often misapplied. I think that some of the difficulty is when “stability” derived from one kind of “project” is applied to quite a different kind of “project”.

Large projects: I have been involved in some large efforts that were tagged as projects: a $120 million USAID S&T project in the early 1980s; a $300 million phase of a multiyear World Bank S&T project and a $150 million follow-on World Bank S&T project in the late 1990s. These “projects” were all predicated on analysis based on the idea that they would institutionalize better innovation systems in their host countries. In such a context, there is every reason for concern on the sustainability of the institutional reforms. However, to transfer “sustainability” concepts from such an application to small projects seems to me, counterproductive.

“Implementation projects”, such as a project to build a Internet backbone, are engineering efforts. Once you build a bridge, you don't keep building new bridges in the same place. One does not reasonably ask if such a project is sustainable. Of course, one would expect the Internet backbone to last for a long time, and carry traffic, and one would hope that the infrastructure was sustainable in other senses. The need to sustain the capacity to carry out such a project depends on the circumstances. (Indeed, unfortunately, too often, donors do not institutionalize needed engineering capacity in developing nations when they could do so with little additional cost to the construction project.)

“Pilot projects” are, by definition, intended to test innovations, and see if they work. Therefore one would expect to see sunset clauses in Pilot projects – that they should be inherently time limited. In a given time, the innovation will either work or not work. Seeking to criticize such a project because it is not sustainable, seems to me to be simply foolish.

“Demonstration projects” are intended to demonstrate something that is already known to work, but to do so to a new audience. A demonstration project inherently involves costs of dissemination of information. Again, I would assume most such projects should have sunset clauses, that they be terminated when they have conveyed their message, or when they have demonstrated lack of interest in that message. They should also not be sustained.

“Best practice projects” are intended to identify good ways to do something. Again, one would assume that once best practice is understood, such projects should either be discontinued or transformed into demonstration projects. Again, the applicability of sustainability criteria is questionable.

Michel suggests that “application project” might be added to the list – a project that
builds upon the outcome of the pilot, etc. and is supposed to have a design that takes due account of lessons learned and therefore to be successful. Good point!

Let me digress for a moment. In the U.S. people frequently start up technology businesses, often leaving universities or large companies to do so. Most last for a few years, and then go out of business. Sometimes they just fail, their physical assets are sold off, and their staff find other jobs. Sometimes they merge with or are acquired by other firms. The system appears to be an important part of the American system of innovation, and more productive in fast moving technology areas than one in which technology development is centralized. Indeed the “creative destruction” implemented by the “evolutionary economic” systems is important to the success of the system. Trying to sustain the small enterprises after they have completed their function is likely to be economically inefficient.

In the recording industry in the U.S. in the 1950’s the advent of television and the changing nature of radio resulted in economic conditions that favored innovation in musical content. The large record companies, that had internalized production (of the moon-June songs popular in the 1940s) began to depend on independent producers, often who had specialized in niche markets – and so Motown developed. Again, needing rapid innovation, the industry went to a rapidly churning set of small enterprises. (The large record companies continued to dominate the production and marketing of records.)

I think in some areas of ICT4D we may be seeing a similar situation. There is a great need for innovation. If we let 1000 flowers bloom, and have a lot of small projects, we will generate some good ideas quickly. But the point I would make is that small, innovative efforts are a good way to face high-risk, high-return situations. As one expects to see a lot of churning among small high technology firms in a successful innovation system, one might expect to see lots of churning among small ICT4D projects in a successful development program. As it is counterproductive to encourage too long a life in high technology firms, so may it be to encourage sustainability in these ICT4D projects.

In the case of small, high-tech firms, even when a firm fails, the physical infrastructure is recycled, the staff usually go to other jobs, taking with them what they have learned. Patents and technologies are transferred. And indeed, when the failure is from a weak technology, society learns something of that weakness. The social cost of the failure is less than that of the investors. So to with the majority of ICT4D projects.

As I described in an earlier posting, if one looks at the process of dissemination of ICT infrastructure and applications in developing nations, “projects” are a very small part of the picture. One might find NGOs projects important for small marginalized groups, but the main action will probably be in large organizations. When we really know what to do, we go ahead and do it!

There is one other aspect of “projectization”. If you want to do a big job, it is often psychologically helpful to divide it into a number of smaller “projects”. I once read that in painting the Golden State Bridge, the job is never finished. When the paint crew finishes the bridge, they simply start all over again at the other end. One assumes that the painters draw lines on the bridge, indicating that which they should complete in the next day, or in the next week. So too, one might projectize the development of the ICT infrastructure in a developing nation. In this context, one might reasonably ask whether the level of effort shown in the first few “projects” could be sustained to the completion of the work.

Concepts of “sustainability” clearly have contributed to the practice of social and economic development. However, as I have tried to indicate, they are not universally applicable. I am not advocating that bad projects be funded and implemented. More simply, I am advocating that some thought be given to the nature of projects, that room be made for high-risk, high-return projects when conditions favor rapid innovation, and that such projects not be held to high standards of sustainability, replicability, and scalability.

Here are a couple of online papers that complement these comments:

The Information for Development Program: Encouraging the Use of ICTs in Developing Countries
In this 2001 paper I sought to examine the degree to which the projects funded by infoDev were likely to be influential as pilots, demonstrations, or by other means. (PDF format, 15 pages)


Constraints to scaling up health interventions: A conceptual framework and empirical analysis
Abstract: While many constraints facing the health sector can be relaxed through the injection of new health sector resources, a lack of money is not the only problem facing the health sector in low and middle income countries. Poor countries differ according to the type and level of constraints they face. We argue that it is important to understand the full range of constraints that influence the use and provision of health services in specific settings when making strategic choices about how to scale-up key interventions to improve the health of poor people. This paper presents a conceptual framework for understanding constraints which is based on the level at which a constraint operates, the nature of the constraint, and its amenability to buy-out in the short term. Cross-sectional data is used to identify proxy measures of these constraints in order to categorise countries according to the type and level of constraint they face. An overall index of constraints is created, which includes variables reflecting demand, health system strength, and environmental characteristics including both governance and geography. Measures of government commitment to the health sector, and the distribution of key health sector inputs are explored but excluded from the index. A typology of countries according to the constraints they face can feed into the estimates of the cost of scaling up interventions, the choices of how to delivery priority interventions, and, potentially, of which countries should be the focus of early efforts.” By K. Hanson, K. Ranson, V. Oliveira-Cruz,
A. Mills, May 2001. (PDF, 106 pages.) This is one of a series of papers on the topic availaibe on the Commission for Macroeconomics and Health website.

MORE ON THE ECONOMICS OF R&D, AND RELATED TOPICS: HEALTH

This entry focuses on health related R&D. It is in fact hard to quantify the benefits from biomedical research.

Final Report of the Commission on Macroeconomics and Health
See especially the section titled: “The Supply of Global Knowledge in the Fight Against Disease” This section of the report focuses on the ratio of R&D funding to DALY’s (disability adjusted life years) for different diseases. The implicit assumption is that equity concerns suggest that health and survival should be equally available to all, and that the low ratios found for tropical diseases and other diseases of poverty indicate inequitable global allocation of R&D funding.

The Benefits of Medical Research and the Role of the NIH
This is a report prepared for the U.S. Senate, and while U.S.-centric, provides some indications of the rates of return on biomedical research and other economic issues. There is an extensive bibliography. May 2000. (PDF, 64 pages.)

Medical Innovation in the Changing Healthcare Marketplace: Conference Summary
This is the summary of a conference held in June, 2001 at the U.S. National Academy of Sciences. Chapters include discussions of the “The Costs and Benefits of Medical Innovation” and “Cost-Effectiveness Studies: A Key to Innovation Development”. The report can be read online (in the format provided by the National Academy Press) or purchased in hard copy.

Pharmaceuticals:

The pharmaceutical industry of course has an idea of the returns to investors from its research and development. One should note that only one in 5,000 compounds discovered makes it to market, and only 30 percent of those products brought to market generates profits that exceed its R&D costs. Thus the profitability of the industry is based on perhaps 20 percent of its products, or perhaps one in 25,000 compounds that are discovered. To understand the average internal return to investment in R&D, then one has to look at the profitability of the company or industry as a whole, not just single products. As one might expect, Pharmaceutical Industry profits are only slightly higher than other industrial profits. If they were much higher, the market and diminishing returns would be expected to rebalance the situation. It seems likely that the higher profits are more related to a risk premium than to high rates of return to R&D. One way that the pharmaceutical industry estimates the social rates of return to R&D is to look at the reductions in medical costs related to newly introduced drugs. It is not the pharmaceutical companies that enjoy these benefits, but rather those who save on the costs that would otherwise have been incurred. Some of these topics are discussed in the following papers:

Why Do Medicines Cost So Much?
This is a publication directed at a general audience by the U.S. Pharmaceuticals Research and Manufacturers Association. It focused on the U.S. industry and market, and of course represents the industries position. The U.S. industry is the most important source of innovation in pharmaceuticals, and the report has both interesting data and a useful discussion of the situation. March 2001. (PDF, 22 pages.)

The Best Value in Medicine Today: How Prescription Drugs Account for a Fraction of Health Cost Increases While Helping to Offset Other Health Costs
Another publication of PhRMA, November, 2002) (PDF, 15 pages.)

Benefits And Costs Of Newer Drugs: An Update
Abstract: “We update and extend our previous study of the effect of drug age -- years since FDA approval --on total medical expenditure, in several respects. The estimates indicate that, in the entire population, a reduction in the age of drugs utilized reduces non-drug expenditure 7.2 times as much as it increases drug expenditure. In the Medicare population, a reduction in the age of drugs utilized reduces non-drug expenditure by all payers 8.3 times as much as it increases drug expenditure; it reduces Medicare non-drug expenditure 6.0 times as much as it increases drug expenditure. About two-thirds of the non-drug Medicare cost reduction is due to reduced hospital costs. The remaining third is approximately evenly divided between reduced Medicare home health care cost and reduced Medicare office-visit cost. We also found that the mean age of drugs used by Medicare enrollees with private Rx insurance is about 9% lower than the mean age of drugs used by Medicare enrollees without either private or public Rx insurance. By Frank Lichtenberg, June 2002. (PDF, 13 pages.)


For public goods, the income from sales of the goods are generally not the best indication of the value of the goods. So cost-benefit calculations based on sales may be inadequate. For example, the benefits that come from mass immunization that eliminates (or greatly reduces) the incidence of an infectious disease will generally exceed the total of what people are willing to individually pay for immunizations. In general we approach this problem by regulation (requiring children to be immunized before entering school), by subsidizing immunization services with public funds, or by reducing the costs to the producers of vaccines (by tax financing R&D, limiting financial risks related to vaccine failure, etc.)

Moreover, poor people simply might not be able to pay as much for pharmaceuticals as public policy suggests they should consume. Pharmaceutical companies indeed have apparently been unwilling to invest in developing new products for diseases specific to poor people in poor nations because the markets for such products were unlikely to generate sufficient income from successful new drugs to provide adequate return on R&D investments. Some interesting approaches to this problem involve tax breaks as subsidies for R&D expenses for such products, or efforts by donor organizations to provide guarantees or subsidies to increase the markets for successful products. Some of these ideas are discussed in the following paper.

World Bank Pharmaceuticals
This paper reviews World Bank financing related to pharmaceuticals, and makes recommendations for improvements in its programs related to pharmaceuticals. Govindaraj R, M.R. Reich and J.C. Cohen, September 2000. (PDF, 42 pages)


Inflation

If funding for biomedical research increases faster than the capacity to carry out biomedical research, one would expect inflation. This webpage, maintained by the U.S. National Institutes of Health suggests that inflation of biomedical research costs in the U.S. has generally been higher than inflation in the GDP.
Biomedical Research and Development Price Index


Some useful websites in the field:

Commission on Macroeconomics and Health
The Commission on Macroeconomics and Health (CMH) was launched in January 2000. Over a two-year period, the Commission is to analyze the impact of health on development and examine the appropriate modalities through which health related investments could have a positive impact on economic growth and equity in developing countries. It will recommend a set of measures designed to maximize the poverty reduction and economic development benefits of health sector investment.

World Bank: Health, Nutrition and Population Publications
The World Bank HPN website has a number of publications dealing with the economics of health care, many of which deal directly or tangentially with information and knowledge issues:

The Global Forum for Health Research
The Global Forum's central objective is to help increase research efforts on diseases representing the heaviest burden on the world's health, which is underfunded, and facilitating collaboration between partners in both the public and private sectors. The website has a number of publications on biomedical research funding.

The Economic Studies Program of the Office of Science Policy and Planning
The Economic Studies Program (ESP) of the U.S. National Institutes of Health (NIH) includes analysis and support of studies in four general areas: 1. The influence of disease burden and research opportunities on the allocation of funds within the NIH budget; 2. The contributions of NIH research to increasing life expectancy, maintaining or enhancing health-related quality of life, and reducing the costs of illness and injury; 3. The contributions of NIH to other national goals, such as economic growth and international competitiveness; and .4. The cost and efficiency of conducting NIH-sponsored research and providing an adequate long-term supply of high-quality scientific investigators, equipment, and facilities.
On the topic of knowledge and information for health:

Global Information Needs for Health
This is the abstract for a working paper of the Commission on Macroeconomics and Health by P. Musgrove. “The paper will draw on national and international data collection system experience, but also on case studies or small-scale examples of how information can be made more useful locally and in real time. Manipulating, transmitting and displaying data have all become much easier, thanks to computers and electronic transfer; accurate collection has also become absolutely easier, but relatively more difficult. The implications of these changes for investment in information will also be examined.


Inequalities In Knowledge Of HIV/AIDS Prevention
From the Abstract: “This note presents a summary overview of information about socio-economic and gender inequalities in knowledge of HIV/AIDS prevention, produced by a series of country studies undertaken by the World Bank’s thematic group on health, nutrition, population and poverty.….The principal general findings are:
· Knowledge of HIV/AIDS prevention is distinctly higher among the better-off than among the disadvantaged in almost every country with available data…..
· The poor-rich differences just noted are distinctly smaller, and knowledge among the poor is distinctly higher in Sub-Saharan Africa than in Latin America……
· Distinct gender differences in HIV/AIDS prevention also exist in most countries, with knowledge among men averaging around 75%, compared with an average of roughly 65% among women……
· If knowledge about HIV/AIDS prevention is seen as an ultimate outcome of communication and education programs and compared with comparable data for other
types of health program, the record of HIV/AIDS prevention knowledge efforts look
relatively favorable….. “
By Davidson R. Gwatkin and Garima Deveshwar-Bahl, November 2001. (PDF, 12 pages.)

ECONOMICS OF INVESTMENTS IN SCIENCE AND TECHNOLOGY

I have done a series of entries on ICTs, economic growth and poverty reduction. In this Blog entry, I will begin to look on some resources relating to science and technology, economic growth, and poverty reduction. I think it is clear that agricultural research is the most mature field of modern knowledge creation in developing countries (followed by bio-medical research, and then perhaps by environmental research), and it is also the field most fully studied by social scientists, including economists.

Strategy Working Paper: Science and Technology in the World Bank
In this paper, I included a section on rates of return to research and experimental development. (2000)

Impact of Agricultural Research on Poverty (IARP)
This is the site of a major project of the International Food Policy Research Institute on the impact of agricultural research on poverty in developing nations. The site provides links to publications. These links are relatively few in number, but they include very important publications resulting from huge amounts of work. These include the two following publications.

A Meta-Analysis of Rates of Return to Agricultural R&D: Ex Pede Herculem?
This study, based on 292 publications reporting 1,886 observations, demonstrates the high rates of return found to agricultural research, but also provides some cautions about naïve use of rates-of-return studies. Julian M. Alston, Connie Chan-Kang, Michele C. Marra, Philip G. Pardey, and TJ Wyatt, October, 2000. This site provides links to the individual chapters of the report which may be downloaded as individual PDF files.

Assessing The Impact Of Agricultural Research On Poverty Using The Sustainable Livelihoods Framework
From the Abstract: “As the goals of international agricultural research move beyond increasing food production to the broader aims of reducing poverty, both agricultural research and studies of its impact become more complex. Yet examining the magnitude and mechanisms through which different types of agricultural research are able to help the poor is essential, not only to evaluate claims for continued funding of such research, but more importantly, to guide future research in ways that will make the greatest contribution to poverty reduction. This paper reports on the approach used in a multicountry study of the poverty impact of research programs under the Consultative Group on International Agricultural Research (CGIAR).” By Michelle Adato and Ruth Meinzen-Dick, March 2002. (PDF, 130KB)

Research and Development
This brief entry by David M. Levy in “The Concise Encyclopedia of Economics” usefully summarize information on rates of return to R&D in the U.S. Research on research is usually done in rich countries, and while the transfer of findings to developing countries may be questioned, it is often done.

Benefits Of The Research And Development Tax Credit
This brief note cites U.S. studies suggesting that the U.S. tax credit on R&D did in fact significantly stimulate private sector R&D spending in the 1990’s, and cites a study suggesting that in the long term, the economic growth resulting from the R&D generated enough new taxes to cover most of the tax revenue lost due to the R&D tax credit.

STILL MORE AGAIN ON ICT, KNOWLEDGE AND ECONOMICS

These are from the Stanford University Department of Economics:

Exorcizing the Resource Curse: Minerals as a Knowledge Industry, Past and Present
Abstract: "Recent literature argues that natural resource abundance is likely to be bad for economic growth. This paper provides a counterargument by highlighting examples of successful resource-based development. The first is historical: the United States from the mid-nineteenth century to the mid-twentieth. We show that U.S. mineral abundance was an endogenous historical phenomenon driven by collective learning, increasing returns, and an accommodating legal environment. Recent instances of successful resource-based growth affirm that so-called “nonrenewable” resources can be progressively extended through exploration, technological progress, and investments in appropriate knowledge. Indeed, minerals constitute a high-tech knowledge industry in many countries." By Gavin Wright , and Jesse Czelusta, July 2002. (PDF, 46 pages)
http://www-econ.stanford.edu/faculty/workp/swp02008.html

Economic Fundamentals of the Knowledge Society
Abstract: “This article provides an introduction to fundamental issues in the development of new knowledge-based economies. After placing their emergence in historical perspective and proposing a theoretical framework that distinguishes knowledge from information, the authors characterize the specific nature of such economies. They go on to deal with some of the major issues concerning the new skills and abilities required for integration into the knowledge-based economy; the new geography that is taking shape (where physical distance ceases to be such an influential constraint); the conditions governing access to both information and knowledge, not least for developing countries; the uneven development of scientific, technological (including organizational) knowledge across different sectors of activity; problems concerning intellectual property rights and the privatization of knowledge; and the issues of trust, memory and the fragmentation of knowledge.” By Paul A. David and Dominique Foray, February 2002. (PDF, 24 pages.)
http://www-econ.stanford.edu/faculty/workp/swp02003.html

From Keeping 'Nature's Secrets' to the Institutionalization of 'Open Science'
Abstract: ““Open science" as a practice became increasing widespread in Europe during the late sixteenth and early seventeenth centuries. It represented a departure from the previously dominant ethos of secrecy in the pursuit of Nature’s Secrets, and its emergence was a distinctive and vital organizational aspect of the Scientific Revolution. The development of norms of disclosure and demonstration, and the rise of “cooperative rivalries” in the revelation of new knowledge, constituted a functional response to heightened asymmetric information problems that had been posed for the Renaissance system of court-patronage of the arts and sciences. Pre-existing informational asymmetries had been exaccerbated by the claims of mathematicians and the increasing practical reliance upon new mathematical techniques in a variety of “contexts of application.” In late Renaissance Europe, the feudal legacy of fragmented political authority had resulted in relations between noble patrons and their savant-clients that resembled the situation modern economists describe as "common agency contracting in substitutes" -- competititon among incompletely informed principals for the dedicated services of multiple agents. These conditions not only induced the formation of mechanisms enabling would-be clients to build public reputations for scientific expertise and credibility, but also tended to result in more favorable contract terms (especially with regard to autonomy and financial support) for the agent-client members of western Europe's nascent scientific communities. Foundations were thus laid for the later seventeenth and eighteenth century institutionalization of the open pursuit of scientific knowledge under the auspices of State-sponsored academies. Rather than being a novel departure induced by the needs of the new style of inquiry, those institutional developments continued a broader intellectual and cultural movement that had been underway in Europe outside the medieval universities. This had manifested itself in the formation of myriad academies that were the precursor form of the private scientific societies that appeared under elite patronage early in the seventeenth century. The ethos and norms of disclosure, and the characteristic supporting institutions of modern, publicly funded open scientific research are, in an important sense, independent historical legacies; they were not derivative from the epistemological aspects of the Scientific Revolution, although to a considerable degree they have been responsible for the successes that “the scientific method” has achieved in the production of reliable knowledge. The fragility of these cooperative features of ‘the R&D infrastructure’ needs to be keep in mind by science policy makers.” By Paul A. David, March 2001. (PDF, 18 pages.)
http://www-econ.stanford.edu/faculty/workp/swp01006.html

Will Building ‘Good Fences’ Really Make ‘Good Neighbors’ in Science?
Abstract: “Problematic issues are raised by the expressed intention of the European Commission to promote greater awareness on the part of scientists in the “European Research Area” about intellectual property rights and their uses in the context of “Internet intensive research collaborations.” Promoting greater awareness and encouraging more systematic usage of IRP protections are logically distinct, but as policies for implementation - especially within the EC’s Fifth Framework Programme - the former can too readily shade into the latter. Building “good fences” does not make for “good (more productive) neighbors” in science. Balance needs to be maintained between the “open science” mode of research, and private proprietary R&D, because at the macro-system level the functions that each is well-suited to serve are complementary. Recent policy initiatives, particularly by the EC in relation to the legal protection of property rights in database, pose a serious threat to the utility of collaboratively consttructed digital information infrastructures which provide “information spaces” for voyages of scientific discovery. The case for alternative policy approaches is argued in this paper, and several specific proposals are set out for further discussion.” By Paul A. David, March 2001. (PDF, 8 pages.)
http://www-econ.stanford.edu/faculty/workp/swp01005.html

The Digital Technology Boomerang: New Intellectual Property Rights Threaten Global "Open Science"
Abstract: “There is a serious threat that ill-considered government support for expanding legal means of controlling access to information for the purpose of extracting private economic rents is resulting in the "over-fencing of the public knowledge commons" in science and engineering. Such a new "tragedy of the commons" would bring adverse long-run consequences for future welfare gains through technological progress, and re-distributional effects further disadvantaging the present economically less advanced countries of the world. Radical legal innovations in intellectual property protection that seriously jeopardize the effective conduct of open, collaborative science have been introduced by the little noticed European Database Directive of March 1996. This initiative forms an emblematic and substantively significant aspect of the broader set of transformations in intellectual property rights institutions that have been initiated in response to the economic ramifications of rapid progress in digital information technologies. The EC Directive poses numerous contentious issues in law and economics that will create ambiguities for business and non-profit activities in this area for years to come. The terms on which those issues are resolved will materially affect the costs and organizational feasibility of scientific projects that are of global reach and importance, especially those that depend heavily upon the collection, management and analysis of large volumes of observational data that cannot be regenerated. This paper sets out the economic case for the effectiveness of open, collaborative research, and the forces behind the recent, countervailing rush to strengthen and expand the scope of intellectual property rights protection. Focusing upon innovations in copyright law and the sui generis protection of hitherto unprotected content, it documents the genesis and analyzes the economic implications of the EC's Database Directive, and related legislative proposals (H.R. 3125, H.R. 354 and H.R. 1858) in the US. Several modest remedial proposals are advanced to mitigate the adverse impact of "the digital technology boomerang" upon open science.” By Paul A. David, October 2000. (PDF, 32 pages.)
http://www-econ.stanford.edu/faculty/workp/swp00016.html

Information and Governance in the Silicon Valley Model
Abstract: “This paper argues that the truly unique role of venture capitalists is found in their information-mediating and governance functions, which can be understood only in the context of relationships between the "clustering" of entrepreneurial firms and (a club) of venture capitalists. The entrepreneurial firms in Silicon Valley compete in innovation and thus their activities are fundamentally substitutes. Therefore, their information processing activities need to be encapsulated from each other to excel competitors. A new product system may be then evolutionarily formed by combining modular products ex post that evolve from such decentralized efforts. In order for such evolutionary selection is possible, however, common standards for interfaces among modular products need to be provided to make individual product attributes compatible. Venture capitalists plays an important role in mediating information necessary for endogenously forming and governing competition among entrepreneurs under such framework. The first section assembles stylized facts about venture capital - entrepreneurial firm relationships as a basis for modeling. The second section presents a framework for comparing information systemic aspects of alternative R&D organizations and tries to understand the unique innovation capability of the Silicon Valley model. The third section then proceeds to the analysis of the venture capital governance as an institution for supporting such information system. Repeated tournaments among initially funded firms for refinancing necessary for the completion of projects, and the threat of termination of financial support by the venture capitalist, are seen to provide greater incentives for the entrepreneurs than under traditional arms length financing. The fourth section discusses the incentives of the venture capitalist and other institutional characteristics of the Silicon Valley model.: By Masahiko Aoki, October, 1999. (PDF, 32 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99028.html

The Explicit Economics of Knowledge Codification and Tacitness
Conclusions: “This paper has looked intensively and critically at one of the several dimensions David and Foray (1996) identified that in their schematic description of the space in which “knowledge products” were distributed. Our focus has been maintained on the most problematic and, for many economists, the most esoteric of the three axes defining that space: the dimension along which codification appeared at one extremum and tacitness occupied the other. This has permitted some further unpacking of the economic determinants of codification decisions, and the resources committed thereto, and it has revealed that the term tacit is being used so loosely in the current economics of science and technology literature that important distinctions, such as the
one separating that which is uncodified in a particular context and that which will not (likely) be codified at all, are blurred, or entirely lost. Also lost from view in many modern discussions of codification is the important difference between codification of procedural knowledge, as distinct from factual propositions. By bringing these into greater prominence, a number of puzzles and inconsistencies which detract from the logic of the analysis of the social return to investment in codification can be resolved.” By Robin Cowan, Paul A. David, and Dominique Foray, May 1999. (PDF, 32 pages)
http://www-econ.stanford.edu/faculty/workp/swp99027.html

General Purpose Technologies and Surges in Productivity: Historical Reflections on the Future of the ICT Revolution
Abstract: “In this essay we reflect on the relevance of early twentieth century experience for understanding the more general phenomenon of recurring prolonged swings in the TFP growth rate in advanced industrial economies. Our discussion builds upon our recent re-examination of the marked acceleration of the pace of total factor productivity growth that occurred in U.S. manufacturing following World War I (David and Wright 1999. After a ‘productivity pause’ of some three decades, during which gross manufacturing output grew at less than one percent per annum relative to inputs of capital and labor, TFP in this sector expanded at more than five percent per annum between 1919 and 1929. This remarkable discontinuity has often been overlooked by modern productivity analysts and economic historians alike; yet it contributed substantially to the absolute and relative rise of the US domestic economy’s TFP residual, and in many respects launched the high-growth era that persisted into the 1970s. Upon closer scrutiny, this implied shift in the prevailing technological regime can be traced to critical advances in the electrification of industry, which we interpret as a phase in the diffusion of a general purpose technology (GPT) that made possible significant fixed-capital savings while simultaneously increasing labor productivity as well. But a purely technological explanation of the productivity surge is inadequate. It would neglect the concurrence of these developments with important structural changes in US labor markets, and the interrelationships that appear between managerial and organizational innovations and the new dynamo based factory technology, on the one hand, and between both forms of innovation and the macroeconomic conditions of the 1920s on the other hand. We explore this more complex formulation of the dynamics of GPT diffusion by considering the generic and the differentiating aspects of the US experience with industrial electrification in comparison with that of the UK. The cross-national perspective brings to light some differences between leader and follower economies in the dynamics of GPT diffusion and its relationship to the strength of surges in productivity growth. It also serves to underscore the important role of the institutional and policy context with respect to the potential for upgrading the quality of the workforce in the immediately affected branches of industry. The concluding sections of the essay offer some reflections on the analogies and contrasts between the modern experience of the information and communications technology (ICT) revolution, and the historical case of a socio-economic regime transition involving the electric dynamo. Contextualizing the GPT concept in explicitly historical terms enables us to shed further light upon the paradoxical phenomenon of the late twentieth century productivity slowdown, and also to point to some contemporary portents of a future phase of more rapid total factor productivity growth.” By Paul A. David and Gavin Wright, July 1999. (PDF, 27 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99026.pdf

At last, a remedy for chronic QWERTY-skepticism!
In this paper Paul A. David argues that the course of technological diffusion is really path dependent – that history counts, and that economists should do research on the topic. Perhaps through better understanding of the nature of this phenomenon, it will be possible to reduce costs associated with such dependence. The QWERTY example is famous: the keyboard was designed for mechanical typewriters, and it has been demonstrated that alternative designs allow faster typing with modern devices; however, the design has been locked in via historical processes that occurred; it might have been possible to intervene at some point to move to more efficient designs, and reduce overall social costs of QWERTY. David faces critics of his views, and argues that path-dependency is a researchable topic. September 1999. (PDF, 13 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99025.html

Heart of Darkness: Public-Private Interactions Inside the R&D Black Box
Abstract: “This paper is a first step toward closing the analytical gap in the extensive literature on the results of interactions between public and private R&D expenditures, and their joint effects on the economy. A survey focusing on econometric studies in this area reveals a plethora of sometimes confusing and frequently contradictory estimates of the response of company financed R&D to changes in the level and nature of this category of public expenditures. Yet, a theoretical framework seldom is provided within which the empirical results are to be interpreted. Some such structure is necessary, in view of the multiple channels through which public research can affect private R&D performance, especially as not all the effects flow in the same direction. A major cause of "inconsistencies" in the empirical literature is the failure to recognize key differences among the various policy "experiments" being considered depending upon the economy in which they are embedded, and the type of public sector R&D spending that is contemplated. Using a simple, stylized structural model, we identify the main channels of impact of public R&D. We thus can characterize the various effects, distinguishing between short-run and long-run impacts that would show up in simple regression analyses of nominal public and private R&D expenditure variables. Within the context of our simple model it is possible to offer interpretations that shed light on recent cross-section and panel data findings at both high (i.e. national) and low (specific technology area) levels of aggregation.” By Paul A. David and Bronwyn H. Hall, March 1999. (PDF, 25 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99024.html

Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence
Abstract: “Is public R&D spending complementary and thus additional to private R&D spending, or does it substitute for and tend to crowd out private R&D? Conflicting answers are given to this question. We survey the body of available econometric evidence accumulated over the past 35 years. A framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross-section data from various levels of aggregation (laboratory, firm, industry, country). The findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the experiment(s) that the investigators envisage is not adequately specified. We conclude by offering suggestions for improving future empirical research on this issue.” By Paul A. David, Bronwyn H. Hall, and Andrew A. Toole, September 1999. (PDF, 67 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99023.html

The Political Economy of Public Science
Paul A. David reviews the assumption of “Open Science” that underlies much of the argument for government support of science. He then reviews trends in science and science institutions in developed nations, to focus on fundamental issues of science policy. May 1999. (PDF, 23 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99022.pdf

Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run
Abstract: “This paper studies a growth model that is able to match several key facts of economic history. For thousands of years, the average standard of living seems to have risen very little, despite increases in the level of technology and large increases in the level of the population. Then, after thousands of years of little change, the level of per capita consumption increased dramatically in less than two centuries. Quantitative analysis of the model highlights two factors central to understanding this history. The first is a virtuous circle: more people produce more ideas, which in turn makes additional population growth possible. The second is an improvement in institutions that promote innovation, such as property rights: the simulated economy indicates that the single most important factor in the transition to modern growth has been the increase in the fraction of output paid to compensate inventors for the fruits of their labor.” By Charles I. Jones, September, 1999. (PDF, 49 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99008.html

Adjusting to a New Technology: Experience and Training
Abstract: “How does the economy react to the arrival of a new major technology? The existing literature on General Purpose Technologies (GPTs) has studied the role that mechanisms like secondary innovations, diffusion, and learning by firms play in the adjustment process. By contrast, we focus on a new mechanisms based on the interplay between technological change and human capital accumulation. We show that technological change that requires more education and training, like computerization, necessarily produces an initial slowdown. Surprisingly, however, technological change that lowers the training requirement, like the move from the artisan shop to the factory, can produce either a bust or a boom. We identify three key properties that determine which effect will occur: (1) the productivity of inexperienced workers; (2) the speed with which experience increases productivity; and (3) the level of general skills required to operate the new technology.” By Elhanan Helpman and Antonio Rangel, December 1998. (PDF, 35 pages.)
http://www-econ.stanford.edu/faculty/workp/swp99002.html