View From Arada | Jan 11,2020
Feb 11 , 2023
By Dani Rodrik ( Dani Rodrik is a professor of international political economy at Harvard University’s John F. Kennedy School of Government. )
While economists and policymakers have long appreciated the economic significance of knowledge, they have not paid sufficient attention to the conditions that make it useful, argued Dani Rodrik, professor of International Political Economy at Harvard Kennedy School and the author of "Straight Talk on Trade: Ideas for a Sane World Economy" in this piece provided by Project Syndicate (PS).
Knowledge holds the key to economic prosperity. Technology, innovation, and know-how come from learning new ways to produce the goods and services that enrich us. Knowledge is also the archetypal "public good": new ideas can benefit everyone; and unless governments or monopolies restrict their dissemination, usage does not diminish availability.
This is especially important for poor countries, because it means they do not have to reinvent the wheel. They can simply adopt technologies and methods created by richer countries to drive their own economic development.
While economists and policymakers have long appreciated the economic significance of knowledge, they have not paid sufficient attention to the conditions that make it useful. Context matters: any mismatch between the conditions under which ideas are generated, and the specificities of the environment where they are applied can significantly reduce the value of acquiring knowledge.
For example, corn is grown worldwide; but it is subject to different environmental threats depending on the local ecology. Research and development efforts have naturally focused on developing resistance to pests that are most common in North America and Europe. As a result, thousands of biotech patents are geared toward the European corn worm, but only five unique patents are for innovations protecting against the maize stalk borer, which predominantly affects Sub-Saharan Africa.
Having studied these and many other examples, economists Jacob Moscona and Karthik Sastry of Harvard University argue that the inappropriateness of technologies developed in advanced economies can pose a significant obstacle to agricultural-productivity growth in low-income areas. According to their analysis, the technology mismatch in crop-specific pests and pathogens alone can account for 15pc of the global disparity in agricultural productivity.
In a recent panel discussion organized by the International Economic Association, Moscona and other experts provided a wide range of illustrations of inappropriate technologies at work. Mireille Kamariza, a bioengineer at UCLA, described how developing diagnostic technologies for tuberculosis and other infectious diseases that chiefly affect low-income countries has lagged far behind diagnostic technologies for rich-country diseases.
When COVID-19 hit rich countries, hundreds of diagnostic tests became available within months. By contrast, it took more than a century to achieve comparable progress concerning tuberculosis. Moreover, advanced tuberculosis-diagnostics techniques still rely on trained technicians and a steady supply of electricity, which may not be available in low-income settings.
The mismatch can also occur within countries when technologies tailored to the interests of certain groups are deployed more widely. Automation and digital technologies, for example, can be inappropriate if they produce undesirable effects for many workers. As Anton Korinek of the University of Virginia notes, all innovations are double-edged: they can enhance productivity in the aggregate, but they can also generate sharp redistributive effects favouring capital owners over workers. And when the overall productivity gains are not very large, they can easily be outweighed (from a societal perspective) by the negative redistributive effects – a phenomenon that economists Daron Acemoglu and Pascual Restrepo call "so-so" innovation.
Robots provide the clearest example of this adverse shift against workers, and artificial intelligence is expanding the range of domains where distributional conflicts can become significant. As Korinek points out, chatbot software that replaces human workers enhances the returns to AI engineers and firm owners, while displacing workers with less than a college education. The impact is magnified in developing countries where low-cost labor is the sole source of comparative advantage.
Moreover, knowledge is embedded not only in seeds or software but also in cultural norms. At the same IEA panel, economist Nathan Nunn talked about a different, temporal kind of mismatch where knowledge and practices that were appropriate for society at one time could later become dysfunctional. Cultural traditions pass on useful knowledge to future generations. Religious rituals, for example, can help coordinate crop planting, and particular cooking techniques a family's elders imparted can protect against dietary toxins. But since cultural norms evolve slowly, rapid changes in society can produce an "evolutionary mismatch."
Drawing on his work with Leonard Wantchekon, Nunn gives the example of Africa's traumatic experience with transcontinental slavery. Communities in Africa that had the most extensive contact with slave traders developed a deep mistrust of outsiders, leaving them with a cultural inclination counterproductive to developing a flourishing market economy in today's world. Similarly, Americans' aversion to redistribution appears to reflect the country's high degree of economic mobility in the past, rather than current realities.
Whether they take the form of inappropriate technologies or cultural practices, such mismatches need to be addressed if knowledge is going to benefit society. One strategy is consciousness-raising.
That is how the environmentalist movement helped steer consumer demand away from fossil fuels and mobilize support for the development of renewables. A similar "technology for workers" movement could redirect innovation in a more labour-friendly direction. Enhancing the voice of relevant stakeholders – such as workers or poor countries – in decisions about innovation and technology would guard against the adoption of inappropriate technologies.
Public policies are also critical.
The Green Revolution in the 20th Century was motivated by the explicit recognition that enhancing agricultural productivity in low-income countries would require developing high-yield seed varieties suited to tropical environments. Though we lack a similar multilateral effort to close global technology gaps today, Moscona points to several middle-income countries (India, Brazil, South Africa) that have the capacity to develop technologies more appropriate to developing economies.
But even in those countries, innovation tends to follow the norms and preferences of Silicon Valley, rather than local needs. Policymakers and innovators alike would do well to remember that it is not knowledge, but rather useful knowledge, that empowers us.
PUBLISHED ON Feb 11,2023 [ VOL 23 , NO 1189]
View From Arada | Jan 11,2020
View From Arada | Aug 14,2021
Viewpoints | Nov 26,2022
Viewpoints | Jun 19,2021
Editorial | Nov 20,2021
Editorial | Nov 20,2021
Commentaries | Mar 11,2023
Viewpoints | Nov 16,2019
Fortune News | Sep 19,2020
Fortune News | Feb 02,2019
Photo Gallery | 69308 Views | May 06,2019
Photo Gallery | 61186 Views | Apr 26,2019
Fortune News | 53043 Views | Jul 18,2020
Fortune News | 52831 Views | Sep 01,2021
Commentaries | Jun 03,2023
Life Matters | Jun 05,2023
My Opinion | Jun 03,2023
Sunday with Eden | Jun 03,2023
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
In the animating landscape of Ethiopia's economic reality, an increasingly fervent tr...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
At the hub of Ethiopia's fiscal planning on King George VI Street, the country's budg...
May 27 , 2023
Tauted as a somnolent giant, Ethiopia's financial scene now stirs, roused by favourab...
May 20 , 2023
The pungent irony wafting from Pretoria last week was hard to miss. Cyril Ramaphosa,...
May 13 , 2023
In March this year, Kamala Harris, the United States Vice President, visited Ghana, T...
I am acquainted with several young parents who decided to adopt children from non-governmental institutions. The process involved a six-m...
I was in the front seat during a recent car ride and promptly fastened my seatbelt. I unbuckled it upon reaching the destination but th...
Jun 6 , 2023 . By AKSAH ITALO
The tripartite Labour Advisory Board constituting labour, employers and authorities r...
Jun 3 , 2023 . By BERSABEH GEBRE
Addis Abeba's City Administration resumed land auctions after a five-year lull. The a...
Jun 3 , 2023 . By BERSABEH GEBRE
A federal agency invitation to procure a large volume of edible oil found itself with...
Jun 3 , 2023 . By AKSAH ITALO
Public events in the capital foresee a regulatory framework as the Addis Abeba Mayor...
Or see contact page