Publication: From Imitation to Innovation : Public Policy for Industrial Transformation
Loading...
Date
2013-05
ISSN
Published
2013-05
Author(s)
Agénor, Pierre-Richard
Editor(s)
Abstract
What role does public policy play in helping countries accelerate the industrialization process? This note aims to answer this question by applying a framework to analyze the process of transitioning from imitation to innovation. Based on a dynamic model of growth, simulations suggest that learning through imitation may enable firms to improve productivity significantly in a first stage, and that this may eventually benefit innovation activity as well. The model also shows how failure to switch from imitation as the main source of productivity growth to broad-based, homegrown innovation could lead to the 'middle-income trap' that has befallen some countries.
Link to Data Set
Citation
“Agénor, Pierre-Richard; Dinh, Hinh T.. 2013. From Imitation to Innovation : Public Policy for Industrial Transformation. Economic premise;no. 115. © http://hdl.handle.net/10986/17024 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Public Policy and Industrial Transformation in the Process of Development(World Bank, Washington, D.C., 2013-04)This paper studies the role of public policy in promoting industrial transformation from an imitationbased, low-skill economy to an innovation-based, high-skill economy, where technological progress now occurs through the domestic invention of ideas. Industrial transformation is measured by changes in an index of industrial structure, defined as the ratio of the variety of imitation- to innovation-based intermediate goods. A key mechanism through which productivity increases initially in both the imitation and innovation sectors is through a knowledge externality associated with learning by doing in the imitation sector. The process of industrialization increases the demand for high-skill labor, inducing individuals to invest in education. The model also emphasizes the distinction between basic or core infrastructure, which promotes imitation, and advanced infrastructure, which promotes innovation. A calibrated version for a low-income country is used to perform several policy experiments, including an increase in investment in infrastructure, a reduction in the cost of training, and improved enforcement of property rights.Publication Social Capital, Product Imitation and Growth with Learning Externalities(World Bank, Washington, DC, 2013-09)Links between social capital, human capital, and product imitation are studied in an overlapping generations model of endogenous growth where the key benefit of social capital is to promote imitation. There is also a two-way interaction between imitation and human capital. Building social capital (which brings direct utility) requires time. Because life expectancy is endogenously related to human capital, time allocation between market work and social capital accumulation is also endogenously determined. Social capital accumulation depends also on access to infrastructure. The model is calibrated numerically for a low-income country. A policy that helps to promote social capital accumulation may be very effective to foster economic growth, even if it involves offsetting cuts in other productive components of government spending, such as education outlays or infrastructure investment. Offsetting cuts in infrastructure investment, however, may be less effective.Publication Light Manufacturing in Africa : Targeted Policies to Enhance Private Investment and Create Jobs(World Bank, 2012-02-21)The World Bank's strategy for Africa's future recognizes the central importance of industrialization in Sub-Saharan Africa, and the consequent creation of productive jobs for Africans, which have long been a preoccupation of African leaders and policy makers. This book represents an attempt to address these issues. The book stresses that, while the recent turnaround in Africa's economic growth is encouraging, this growth must be accompanied by structural transformation to be sustainable and to create productive employment for its people. For many African countries, this transformation involves lifting workers from low-productivity agriculture and informal sectors into higher productivity activities. Light manufacturing can offer a viable solution for Sub-Saharan Africa, given its potential competitiveness that is based on low wage costs and abundance of natural resources that supply raw materials needed for industries. This study has five features that distinguish it from previous studies. First, the detailed studies on light manufacturing at the subsector and product levels in five countries provide in-depth cost comparisons between Asia and Africa. Second, building on a growing body of work, the report uses a wide array of quantitative and qualitative techniques, including quantitative surveys and value chain analysis, to identify key constraints to enterprises and to evaluate differences in firm performance across countries. Third, the findings that firm constraints vary by country, sector, and firm size led us to adopt a targeted approach to identifying constraints and combining market-based measures and selected government interventions to remove them. Fourth, the solution to light manufacturing problems cuts across many sectors and does not lie only in manufacturing alone. Solving the problem of manufacturing inputs requires solving specific issues in agriculture, education, and infrastructure. Fifth, the report draws on experiences and solutions from other developing countries to inform its recommendations. The report's goal is to find practical ways to increase employment and spur job creation in Sub-Saharan Africa.Publication Access to Finance, Product Innovation and Middle-Income Traps(World Bank, Washington, DC, 2014-02)This paper studies interactions between access to finance, product innovation, and labor supply in a two-period overlapping generations model with an endogenous skill distribution and credit market frictions. In the model lack of access to finance (induced by high monitoring costs) has an adverse effect on innovation activity not only directly but also indirectly, because too few individuals may choose to invest in skills. If monitoring costs fall with the number of successful projects, multiple equilibria may emerge, one of which, a middle-income trap, characterized by low wages in the design sector, a low share of the labor force engaged in innovation activity, and low growth. A sufficiently ambitious policy aimed at alleviating constraints on access to finance by innovators may allow a country to move away from such a trap by promoting the production of ideas and improving incentives to invest in skills.Publication The Challenge of Youth Employment in Sri Lanka(World Bank, 2010)Sri Lanka has been regarded as a model of a country with successful social policies, yet for decades it has faced major challenges in providing employment and satisfying other aspirations of youth. Although the labor force has become more educated, and this trend is particularly marked for youth, the main source of employment for both youth and adults remains the informal sector. Moreover, the importance of the informal sector as a source of employment has increased since the mid-1990s. On the positive side, unemployment declined in last decades, particularly for youth. The Sri Lankan government has continually acted on various fronts to address the youth unemployment problem. It has tried to improve and modernize Sri Lanka's general education system, which has long been criticized as too academic, and to increase the accessibility of training so as to promote the employability youth leaving school. Other actions included strengthening entrepreneurship programs and introducing career guidance and counseling and improving labor market information to help young people in their job searches and to guide human resource planning. In 2007, the government developed the National Action Plan for youth employment, built, for the first time, on a coherent youth employment policy framework and deriving an encompassing and consistent set of policy recommendations. The plan was based on in-depth analysis of Sri Lanka's labor market, provided via a series of background papers undertaken under the auspices of the Youth Employment Network (YEN). To provide the richness and comprehensiveness of this analysis in its totality, these papers, updated and revised, are collected in the present book. This book offers a wealth of valuable advice to the government and other stakeholders to achieve this goal. By exploiting the full potential of the youth, not only will their talent, aspirations, and energy be harnessed to advance economic growth, but also the existing inequities will be reduced and, hopefully in the longer run, eliminated.
Users also downloaded
Showing related downloaded files
Publication Guide to the Debt Management Performance Assessment Tool(Washington, DC, 2008-02-05)The purpose of this document is to provide guidance and supplemental information to assist with country assessments of debt management performance, using the Debt Management Performance Assessment (DeMPA) tool. The DeMPA is a methodology used for assessing public debt management performance through a comprehensive set of 15 performance indicators spanning the full range of government Debt Management (DeM) functions. It is based on the principles set out in the International Monetary Fund (IMF) and World Bank guidelines for public debt management, initially published in 2001 and updated in 2003. It is modeled after the Public Expenditure and Financial Accountability (PEFA) framework for performance measurement of public financial management. The DeMPA has been designed to be a user-friendly tool to undertake an assessment of the strengths and weaknesses in government DeM practices. This guide provides additional background and supporting information so that a no specialist in the area of debt management may undertake a country assessment effectively. The guide can be used by assessors in preparing for and undertaking an assessment. It is particularly useful for understanding the rationale for the inclusion of the indicators, the scoring methodology, and the list of supporting documents or evidence required, and the questions that could be asked for the assessment.Publication Crime and Violence in Central America : A Development Challenge - Main Report(World Bank, 2011-01-01)Crime and violence are now a key development issue for Central American countries. In three nations El Salvador, Guatemala, and Honduras crime rates are among the top five in Latin America. This report argues that successful strategies require actions along multiple fronts, combining prevention and criminal justice reform, together with regional approaches in the areas of drug trafficking and firearms. It also argues that interventions should be evidence based, starting with a clear understanding of the risk factors involved and ending with a careful evaluation of how any planned action might affect future options. In addition, the design of national crime reduction plans and the establishment of national cross-sectoral crime commissions are important steps to coordinate the actions of different government branches, ease cross-sectoral collaboration and prioritize resource allocation. Of equal importance is the fact that national plans offer a vehicle for the involvement of civil society organizations, in which much of the expertise in violence prevention and rehabilitation resides. Prevention efforts need to be complemented by effective law enforcement. The required reforms are no longer primarily legislative in nature because all six countries have advanced toward more transparent adversarial criminal procedures. The second-generation reforms should instead help deliver on the promises of previous reforms by: (i) strengthening key institutions and improving the quality and timeliness of the services they provide to citizens; (ii) improving efficiency and effectiveness while respecting due process and human rights; (iii) ensuring accountability and addressing corruption; (iv) increasing inter-agency collaboration; and (v) improving access to justice, especially for poor and disenfranchised groups. Specific interventions reviewed in the report include: information systems and performance indicators as a prerequisite to improve inter-institutional coordination and information sharing mechanisms; an internal overhaul of court administration and case management to create rapid reaction, one-stop shops; the strengthening of entities that provide legal counseling to the poor and to women; and the promotion of alternative dispute-resolution mechanisms and the implementation of community policing programs.Publication The Mexican Social Protection System in Health(World Bank, Washington DC, 2013-01)With a population of 113 million and a per-capita Gross Domestic Product, or GDP of US$10,064 (current U.S. dollars), Mexico is one of the largest and highest-income countries in Latin America and the Caribbean (LAC). The country has benefited from sustained economic growth during the last decade, which was temporarily interrupted by the financial and economic crisis. Real GDP is projected to grow 3.8 percent and 3.6 percent in 2012 and 2013, respectively (International Monetary Fund, or IMF 2012). Despite this growth, poverty in the country remains high; with half of the population living below the national poverty line. The country is also highly heterogeneous, with large socioeconomic differences across states and across urban and rural areas. In 2010, while the extreme poverty ratio in the Federal District and the states of Colima and Nuevo Leon was below 3 percent, in Chiapas, Guerrero, and Oaxaca it was 25 percent or higher. These large regional differences are also found in other indicators of well-being, such as years of schooling, housing conditions, and access to social services. This case study assesses key features and achievements of the Social Protection System in Health (Sistema de Proteccion Social en Salud) in Mexico, and particularly of its main pillar, Popular Health Insurance (Seguro Popular, PHI). It analyzes the contribution of this policy to the establishment and implementation of universal health coverage in Mexico. In 2003, with the reform of the General Health Law, the PHI was institutionalized as a subsidized health insurance scheme open to the population not covered by the social security schemes. Today, the PHI covers all of its intended affiliates, about 52 million peoplePublication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.