Science, technology and innovation for economic development

Science, technology, and innovation are essential for economic development. Indeed, technological progress is the primary source of economic growth and social inclusion. It increases economic output and people’s well-being by improving productivity, enabling more production with the same resources, and fostering innovation and development. Let us see how.

 The image above is for illustration- credit: UN LDC

Science, technology and innovation for economic development

By Rédha Younes Bouacida in El Watan (in French)

23 December 2024

Science, technology and innovation are significant challenges to technological progress and economic and social development.

Indeed, technological progress is the primary source of economic growth and social inclusion. It increases economic output and people’s well-being by improving productivity, enabling more production with the same resources, and fostering innovation and development (UNCTAD, 2017).

As such, the Sustainable Development Goals (SDGs) Agenda 2015-2023 can only achieve results when all countries, especially developing countries, can use scientific and technological knowledge and innovation more effectively in their social and economic processes.

Human skills and capacities for producing and absorbing new knowledge are needed. Abilities consist of persons qualified for tacit knowledge, knowledge embodied in capital goods in particular, and knowledge not incorporated, most often of a formal nature.

This knowledge and skills can be produced in-house or imported from outside. The two modalities coexist in varying proportions in all economies and all companies.

In contrast to advanced countries, developing countries that lag in science and technology have a clear advantage in the external-origin part (the absorption of external knowledge) because their level of human skills and R&D efforts is average, limiting the increase in the stock of knowledge.

Indeed, scientific and technological skills are essential for innovation activities and technical progress. Therefore, building skills and capacities is one of the significant and decisive elements of economic performance, both business and macroeconomic.

This trend is linked to the role of the development of the knowledge economy, where institutions and organizations support education and skills training, research funding and innovation, intellectual property regulations and regimes, etc., as strategic elements for promoting innovation and creating wealth.

This has affected the areas of intervention of public authorities within countries and the need to establish science, technology, and innovation policies to build a knowledge-based economy.

At the microeconomic level, these upheavals have also affected companies and their operations, resulting in the development of technologically innovative companies that are more economically competitive.

Thus, economic development is linked to improving the workforce’s skills, producing and disseminating knowledge within companies and the economy in general, reproducing effective practices, and finally, improving the quality of products and production processes.

As the two economists Haudeville and Younès Bouacida (2015) explain, “their implementation requires significant capital for investment, training, and research. They are the result of a genuine investment process, in the same way, that allows the development of natural resources.

Only the object is different; in one case, it is the development of natural resources; in the other, the development of human capacities.” Finally, economic development is attached to society’s culture of development and collective values. Indeed, it now seems in developing countries, more and more formally, that development no longer depends solely on economic or political parameters but also on the collective values and the culture of development of the population and society in general.

The experience of Southeast Asian countries that have emerged sustainably from underdevelopment has shown that, although they were devoid of specific areas and all natural resources, they achieved this result only with the work capacity of their population.

These people were disciplined and animated by a sense of national interest. The cultural traits of these societies were optimism about the future and enthusiasm for development. As the economist Casson (1993) points out, collective values also influence the economic performance of a society because they create moral cohesion. 

Therefore, this presupposes work, seriousness in work, respect for the dignity of the human person, which allows for greater harmony in society, respect for the laws and rules in force, and action in the general interest.

 

Thus, these are key elements for a country to position itself in the trajectory that leads to economic and social development. The example of Southeast Asian countries (South Korea, Hong Kong, Singapore or Taiwan) in the past, or that of China in the recent past, rightly illustrates this phenomenon. These countries have been able to adapt the variables of skills and capacity training, innovation and progress to their context and have succeeded in ensuring a sound development policy.

 

Encouraged by the culture of development and the collective values of their populations and societies, these countries have been able to retrace the path that separated them from technological frontiers over a few decades and position themselves sustainably in the same way as developed countries. Thus, these examples make it possible to identify universally valid rules for moving from underdevelopment to economic and sustainable development.

 

Algeria is quite favoured in terms of the conditions for economic take-off compared to other countries of the same level. “The largest country in Africa and the third largest Arab economy, Algeria returned to the category of upper-middle-income countries according to the World Bank’s classification in July 2024.

Over the past two decades, Algeria has made progress in economic and human development, investing in infrastructure projects and introducing redistributive social policies that have reduced poverty and significantly improved human development indicators” (World Bank, 2024).

With abundant natural resources, a young population, a formidable reservoir of scientific and technological skills and cheapness, the promotion of entrepreneurial universities and innovation, and proximity to the European and African markets, Algeria has enormous potential to become a significant emerging country very shortly and quickly join the ranks of developed countries.

 

Prof. K. Rédha Younès Bouacida, PhD in Economics from Aix Marseille University, France

 

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