Technology and innovation in economic development

There can be few nations or regions, developed or developing, that do not see the benefit to their economic prospects of high added value from hi-tech industries, but developing such industries requires more than just desires and plans: it requires a deep understanding of the forces and mechanisms by which people turn technology into economic wealth, and how various regional actors and the regional environment can interact to reduce barriers and produce a stimulating effect.

The process of public-sector intervention presents a major opportunity for success, and at the same time a high risk of failure. These mechanisms are more organic than mechanical. They cannot easily be transplanted from one environment to another but have to be largely home-grown based on empirical experience from similar environments, plus some inspired translation of successful schemes into the local environment, and perhaps some original thinking.

Inward investment is a quick cure-all for economic blight of sunset industries, but it is not a long-term solution. The only sustainable economic advantage comes from diverse indigenous industries that are part of the regional environment.

Intervention requires good self-knowledge, a clear strategy, coordinated cooperation from many different actors, and consistent effort over time. Despite the challenges, there is the possibility of re-invention, given a good plan and a concerted effort.

Every region now faces the threat of global competition from low-cost economies. However, those economies will be the consumers of the future. Maybe this is just life’s inevitable cycle of rise and decline, but maybe, just maybe, the thoughtful and skilful harnessing of technology and innovation can preserve developed world lifestyles and help to build a more balanced global society.