International technology transfer and economic development: the case of China and

Pakistan

Three parts (chapters ratio 3:3:4=10-pages 90:90:120=300)

Part one: Theoretical and Conceptual background(3)

Objectives:
Establish the question or problem
What is the role of international technology transfer in economic
development and what can the host and donor nations do to promote that?
Prepare the background for analysis
Explain technology transfer as a subject of study: typical Vs modern
approaches to understanding it
Focus on the evolution of the understanding
Explain important concepts and terminology
Conceptual ambiguity is an impediment to be resolved
Reduce ambiguity and complexity by giving the exact terminology
Part two: Global Technology generation, transfer and learning system(3)
Objectives:
Build a model of global technology creation, transfer and learning systems
Elaborate the economic, geographical, demographic, historical and
technological aspects of the different systems
Explain the historic evolution of these systems and the future trends
Describe the role of interactions and transfers among the systems, resulting
changes in technological capability and learning capacities and policies thereof
Establish the usefulness and limits of these conceptual models
Part three: Technology Transfer from China to Pakistan the state of affairs and prospects
(4)
Objectives:
Prepare the background for understanding the economic, political and
strategic histories of the two nations
Investigate the path of technological learning and development
taken by the two nations
Explain their mutual interactions and evaluate the status, evolution and
impact of technological cooperation policies.
Current status and its possible outcomes, (economic marginalization,
diplomatic slavery) 2 case studies
Propose the systematic and policy considerations for a long term plan of
technological learning and development
1. Chapter one: Introduction (PAGE)
1.1. Purpose of the study ( page)
1.1.1. Pakistan and china historical friendship and interrelation
1.1.1.1. Recent development of China and Pakistan’s look east policy
1.1.1.2. numerous bilateral agreements
1.1.1.3. China is the biggest and growing source of technology
1.1.1.4. Pakistan remains backward
1.1.2. What can we learn from China and about China
1.1.2.1. How can Pakistan achieve similar success
1.1.2.2. how can China help Pakistan achieve this success
1.1.3. Understanding technology transfer
1.1.3.1. Typical Vs modern (static Vs dynamic) understanding
1.1.3.2. modeling technology generation and transfers on the global scale
1.1.3.3. modeling international Technology transfer between any two
nations
1.1.4. Policy Analysis
1.1.4.1. Analysis of past and present policies and their results
1.1.4.2. proposing changes in policy and the policy making system
1.2. Fundamental concepts
1.2.1. Development
1.2.1.1. what is economic development,
1.2.1.2. Development is concerned with knowledge
1.2.1.3. technology is knowledge in action
1.2.2. Technology
1.2.2.1. Conceptual and definition problems
1.2.2.2. Different perspectives of studying technology
1.2.2.2.1. Economic aspect
1.2.2.2.1.1. sectoral usage of technology
1.2.2.2.1.2. knowledge intensity classification
1.2.2.2.2. Social aspect
1.2.2.2.3. Technical aspect
1.2.2.3. Technology and knowledge, economic value of technology
1.2.2.3.1. Components of technology
1.2.2.3.1.1. Technoware, Inforware, Humanware and Orgaware
1.2.2.3.1.2. Core competency and dynamic capability
1.2.2.4. The uncertainty factor
1.2.2.5. A functional definition and its terms and conditions
1.3. Designing of the study (1 page)
1.3.1. same as the objectives detailed above.
2. Chapter Two: Technology Transfer
( pages)
2.1. Definition
2.1.1. Definitions by different authors and different perspective
2.1.1.1. our working definition
2.1.2. Forms of transfer (knowledge, artifacts, etc know how etc)
2.1.3. Means of transfer
2.1.3.1. active/regular/intended/planned means, licensing, IP, FDI, Trade,
training and education, joint research, state and commercial, etc
2.1.3.2. passive/irregular/unintended/unplanned means imitation, reverse
engineering, spillover effect, copy right infringements
2.1.4. clarifying other related concepts
2.1.4.1. Invention and Innovation
2.1.4.2. Learning
2.1.4.3. Diffusion (commercial and market/social)
2.1.4.4. Capability and Capacity
2.1.4.5. Internal and international transfer (firm level a-national nature of
technology, policy level impact of diplomatic relations)
2.1.5. intellectual property rights
2.1.6. Criteria for success
2.1.6.1. out of the door
2.1.6.2. installation
2.1.6.3. commercialization
2.1.6.4. capability development
2.1.6.5. general increase in productivity and profitability
2.1.7. sustainability
2.1.8. Problems of transfer (Risks and costs of learning Vs developing)
2.1.8.1. Technological capability
2.1.8.1.1. lack or awareness
2.1.8.1.2. lack of information/communication
2.1.8.1.3. lack of ability to choose/select/vision/trust/
2.1.8.1.4. high risk/fear of failure
2.1.8.1.5. path dependence
2.1.8.1.6. shortage of capital
2.1.8.2. Framework condition
2.1.8.2.1. Nature of technology it self
2.1.8.2.2. industrial and state policies social norms
2.1.8.2.3. network effect
2.1.8.2.4. infrastructural weakness
2.1.8.2.5. technical support
2.1.8.2.6. availability of raw materials/ complementary goods
3. Chapter three: Historical overview of the technology transfer studies
(pages)
3.1. Historical progress
3.1.1. Ancient economy, Silk rout wars and trade
3.1.1.1. Ancient innovation and diffusion
3.1.2. Industrial revolution and the spread of the printing press and other
technologies in European countries
3.1.2.1. Colonial era and spread of western technologies
3.1.2.2. Japanese technological development
3.1.2.3. Technological development of the colonies and China
3.2. Modern history of technology transfer trends and research
3.2.1.1. Modern economic setting
3.2.1.2. UN platform, its work
3.2.1.3. post ww-ii reconstruction and marshal plan,
3.2.1.3.1. early economic approach, internal capability plus foreign
support
3.2.1.4. sixties and seventies the developing countries concern for
technological development,
3.2.1.4.1. import substitution
3.2.1.4.2. nationalization
3.2.1.4.3. planned economy
3.2.1.4.4. oil shocks
3.2.1.4.5. appropriate technology concept
3.2.2. eighties and nineties the rise of the subject
3.2.2.1. famous authors and their work
3.2.2.1.1. transaction cost theory
3.2.2.1.2. technology life cycle model
3.2.2.1.3. technology gap theory
3.2.2.1.4. the eclectic model of technology transfer
3.2.2.1.5. others
3.2.3. late nineties and the new millennium
3.2.3.1. the arrival of innovation studies and decline of international
technology transfer research
3.2.3.2. fundamental changes in development patterns
3.2.3.2.1. the rise of IT
3.2.3.2.2. Modular production
3.2.3.2.3. off shoring and trade blocks
3.2.3.2.4. end of cold war
3.2.3.2.5. western scholars turn to internal technology transfer
3.2.3.2.6. mega corporations
3.2.3.2.7. hopelessness of developing countries shift to inward focus
3.2.3.2.8. loss of interest in developing world: most aspects already
understood, lack of generalization in the rest, high complexity
recognized, small number of authors, globalization, understanding
of the misconceptions
3.2.3.3. problems with the typical approach: based on traditional economic
concepts thus inherent faults, misconception about neutrality of
knowledge, misconception about the difference between innovation and
technology transfer or technological change, shortened technology life
cycles
 3.2.4. Part two: Global Technology generation, transfer and learning system
Objectives:
Build the theoretical background for a systems model of international technology
transfer
Review the indicators of development, trade, investment, knowledge generation
and technology transfer, elaborate status and evolutionary changes

Build a model of global technology creation, transfer and learning systems.

A conceptual model to plot the structural, industrial, technological,
institutional, and other changes that occur with technology generation,
transfer and learning in the global scenario
A generic model to plot a nation’s position and suitable trajectory of
development

Establish the usefulness and limits of the conceptual model

4. Chapter four: the modern approaches

(pages)
4.1. the systems concept
4.1.1. brief introduction
4.2. systems view in economics, the evolutionary economics and the institutional
economics
4.2.1. failures of the traditional economics
4.2.1.1. limitations of the subject, assumptions and reductionism
4.2.2. Economic prosperity depends on technological utilization
4.2.2.1. technology related failures
4.2.2.1.1. exogenous factor
4.2.2.1.2. Linear approach
4.2.3. the rise of the systems
4.2.3.1. Schumpeterian approach and other contributions
4.2.3.2. works by Lundvil and Friedman, focusing attention to innovation
that’s very much a technology transfer issue
4.2.3.3. the national system of innovation,
4.2.3.4. the technological systems
4.2.3.5. the national learning systems
4.2.4. technology as a systematic concept
4.2.4.1. technology evolves inside other systems namely economic and
social
4.2.4.2. technology inside a firm
4.2.4.3. the meso level
4.2.4.4. the macro level
4.2.4.5. components, interrelatedness, systematic synergies, emergence and
dynamic balance and evolution
4.2.4.6. technology transfer and development are systematic
4.2.5. technology transfer in a system perspective
4.2.5.1. Firm to firm transfer two firms in the same system
4.2.5.2. international transfer two firms in two systems
5. Chapter five: The global technology generation and transfer system
5.1. the uneven distribution of knowledge and wealth
5.1.1. the three distinct states of knowledge creation transfer and utilization
5.1.1.1. defining the system, components, interactions boundaries and
environment
5.1.1.2. the innovative and learning core of the system
5.1.1.2.1. organizations, institutions and the state
5.1.1.3. the integrated socio economic system drivers and barriers of
innovation and technology development
5.1.1.4. the power of the corporations
5.1.1.5. interdependence and co-evolution of the knowledge technology
and economic systems
5.1.2. the knowledge creation systems of the advanced nations, cases of the
developed world
5.1.2.1. the steady state and continuous progress
5.1.2.2. the virtuous cycle of knowledge and technologies
5.1.3. the lagging slow learning systems of underdeveloped economies, least
developed countries and lower income developing countries
5.1.3.1. the steady state of the system, and poverty trap
5.1.3.2. the vicious cycle of low knowledge and technology
5.1.3.3. drivers and barriers of innovation and technology development
5.1.4. the interaction between the advanced and the lagging systems
5.1.4.1. classified analysis of interactions and its effects on reducing the
development and technology gap
5.1.4.2. trade in high value added products vs basic commodities
5.1.4.3. foreign direct investment and development aid
5.1.4.4. licensing of technological knowledge
5.1.4.5. arrival of students and immigration, brain drain
5.1.4.6. the widening gap
5.1.5. the nations in transition, active learning systems, cases of Japan, Korea,
5.1.5.1. initial preconditions for change
5.1.5.2. the emergence of a learning system at the core
5.1.5.3. initial state of the socio economic systems
5.1.5.4. significance of the role of the state and market
5.1.5.5. integrated transformation of the core and the periphery
5.1.5.6. transition from a learning to an innovating system
5.1.6. active learning systems interactions with the advanced systems and the
lagging systems (south-south)
5.1.6.1. The market driven interactions: appropriability effects of
technology transfer from the active learning system to lagging system,
proximity, price, expertise, investment, need, competition, etc.
5.1.6.2. the role of state in intera and inter national development,
significant of the advanced south for developing south
5.1.6.3. designing the China- Pakistan specific model for study
6. Chapter Six: indicators of the global systems and interpretations
6.1.1. explaining indicators and their role in understanding the extent of reality
6.1.1.1. Growth indicators are simple, development indicators are
numerous and interconnected
6.1.2. list of indicators: break down on technology system basis
6.1.2.1. overall economic development indicators GDP, etc
6.1.2.2. level of technological development
6.1.2.3. S&T and knowledge and brain drain
6.1.2.4. living standards, Human Development Index
6.1.2.5. investment FDI, financial and technology
6.1.2.6. trade, segmented as high, medium and low tech
6.1.2.7. economic structural change, employment, sectoral GDP, exports
6.1.2.8. savings and domestic investment
6.1.2.9. governance and quality of public service
6.1.2.10. development aid
6.1.2.11. environment and sustainable use of resources
6.1.2.12. intellectual property rights
6.1.3. interpretations
6.1.3.1. state, magnitude, trends and changes,
6.1.3.2. regional factors
6.1.3.3. grouping of indicators
6.1.3.4. classification of the economies on knowledge basis
6.1.3.5. empirical evidence for the existence of global technology creation,
transfer, learning and development
Part three: Technology Transfer from China to Pakistan the state of affairs and prospects
(4)
Objectives:
Prepare the background for understanding the economic, political and
strategic histories of the two nations
Investigate the path of technological learning and development
taken by the two nations
Explain their mutual interactions and evaluate the status, evolution and
impact of technological cooperation policies.
Current status and its possible outcomes, (economic marginalization,
diplomatic slavery)
Propose the systematic and policy considerations for a long term plan of
technological learning and development

7. Chapter Seven: China and Pakistan, histories of the economic and technological
developments and mutual cooperation
7.1. political history
7.2. economic history
7.3. development of the learning and innovation systems
7.4. diplomatic and strategic partnership
8. Chapter Eight: : Technology creation, transfer and learning China and
Pakistan

8.1. history of interregional technology transfer

8.1.1.1. The silk rout
8.1.1.2. Arrival of Buddhism from the Gandhara civilization
8.1.1.3. Arrival of Islam to India and China
8.1.1.4. The Mughal emperors of India and the dynasties of China
8.2. Modern era
8.2.1. cooperation in defense and construction
8.2.1.1.1. defense technologies, Heavy industrial complex Taxila, Kamra
F6 fighter jet rebuild factory, JF Thunder Fighter jet, Alkhalid
Tank, light arms and weapon systems, Pakistan’s defense exports
8.2.1.1.2. Allegations of Nuclear and missile proliferation
8.2.2. bilateral agreements
8.2.2.1.1. FTA
8.2.2.1.2. Pak China investment treaty
8.2.2.1.3. Pak China Center
8.2.2.1.4. Pak China University
8.2.2.1.5. State sponsorship of technology transfer projects
8.2.2.1.6. analysis of the interdependence in economic and technological
cooperation
8.2.3. main areas of technological cooperation: structured interviews of selected
stakeholders, managers, officers, customers and its analysis
8.2.3.1. selected state sponsored projects
8.2.3.1.1. infrastructure construction projects
8.2.3.1.1.1. Karakorum Highway
8.2.3.1.1.2. Gawadar deep sea port
8.2.3.1.1.3. Nuclear power projects
8.2.3.1.1.4. Hydro Electric dams and irrigation projects
8.2.3.1.1.5. earthquake reconstruction
8.2.3.1.1.6. other projects
8.2.3.1.2. agriculture sector
8.2.3.1.2.1. inter state agriculture research cooperation
8.2.3.1.2.2. agriculture machinery exports
8.2.3.1.2.3. imports of agriculture products to China
8.2.3.1.2.4. Pak China fertilizer industry
8.2.3.1.3. minerals and energy sector
8.2.3.1.3.1. Saindak Project
8.2.3.1.3.2. Electric power stations and sustainable energy
cooperation
8.2.3.1.3.3. Chromium and titanium oxides
8.2.3.2. market driven technology transfers
8.2.3.2.1. machinery, tools and component imports
8.2.3.2.2. Direct investments and joint ventures
 8.2.3.2.2.1. Haier
8.2.3.2.2.2. ZTE
8.2.3.2.2.3. Sind Dongfeng buses
8.2.3.2.2.4. SMEs motorcycle industry
8.2.3.2.3. supply of high tech consumer and business products
8.2.3.2.4. other significant channels of technological learning from
China,
8.2.3.2.4.1. Pakistani students in China, graduate, postgraduate
and doctoral, visiting scholars etc.
8.2.3.2.5. R&D collaborations
8.2.3.2.6. Education and training of Govt and Military officers

8.3. Analysis of the current status

8.3.1. Main drivers and Barriers
8.3.2. the geographical and cultural advantages, disadvantages
8.4. evaluating the effectiveness of Technology transfer from China to Pakistan
8.4.1. benchmarking and comparative approach
8.4.2. comparison of national policies effectiveness
8.4.3. sectoral differences in effectiveness
8.4.4. Communication and awareness
8.4.5. mutually reinforcing and isolated channels
8.4.6. Barriers specific to Pakistan
8.4.7. Barriers specific to China
8.5. general and specific considerations in over all technology transfer from China to
Pakistan
8.5.1.1. What China gains from the relationship
8.5.1.2. opening the isolated west of China and North of Pakistan
8.5.1.3. the energy corridor and energy security
8.5.1.4. linguistic differences and learning
9. Chapter Nine: the proposed plan
9.1. Estimation of the learning potential
9.1.1. general levels of technological capability and technology gap
9.1.2. Setting the goal
9.1.2.1. inevitability theorem
9.1.2.2. unrecognized areas of cooperation
9.1.2.3. unnecessary barriers
9.1.2.4. the latent drivers
9.1.3. the Chinese technological trajectory
9.1.4. the Pakistani technological trajectory
9.1.5. ultimate extending and merging the two learning and innovation systems
9.1.6. who should do what
9.1.6.1. Pakistan specific recommendations
9.1.6.2. China specific recommendations
9.1.6.3. broadening the bilateral channels
9.1.6.4. sector specific technological learning potential
9.1.6.5. learning system specific cooperation
9.1.6.6. learning environment enhancement
9.1.7. estimating the mutual benefits
9.1.8. reality check

10. Chapter Ten: General Conclusion

10.1. technology transfer and the systems view
10.2. global system of technology generation and learning
10.3. Technology creation transfer and learning China and Pakistan
11. Loose ends
The Washington Consensus, (China India didn’t follow the free market
path of WCons) trickle down effect and the capability argument

INTERNATIONAL VARIATION IN TECHNOLOGY APPLICATIONS

AND
IMPLEMENTATION.....................................................................................
........ 39
Regional Variation of Technology Application and
Implementation........................... 39
Drivers and Barriers to Implementing Technology
Applications................................. 41
Cost and
Financing..................................................................................................
. 42
Laws and
Policies.....................................................................................................
43
Social Values, Public Opinion, and
Politics............................................................. 44
Infrastructure ..........................................................................................
.................. 45
Privacy
Concerns..................................................................................................
.... 46
Resource Use and Environmental
Health................................................................. 47
R&D
Investment...............................................................................................
........ 48
Education and
Literacy............................................................................................. 49
Population and
Demographics.................................................................................. 51
Governance and
Stability ......................................................................................... 52
Problems and Issues and Relevant Technology
Applications ...................................... 54
Country Capacity to Acquire Technologies and Drivers, and Barriers to
Implementing
Technology
Applications ............................................................................................
.. 62
Selecting Countries for
Analysis.............................................................................. 64
Determining Country Capacity to Acquire Technology Applications and
Their
Drivers and
Barriers.............................................................................................. 65
Determining Country Capacity to Implement Technology Applications
Relevant to
Problems and
Issues......................................................................................................
94
Promote Rural Economic
Development................................................................... 99
Promote Economic Growth and International
Commerce ..................................... 103
Improve Public
Health............................................................................................ 107
Improve Individual
Health ..................................................................................... 111
Reduce Resource Use and Improve Environmental
Health ................................... 115
Strengthen the Military and Warfighters of the
Future .......................................... 119
Strengthen Homeland Security and Improve Public
Safety................................... 123
Influence Governance and Social
Structure ........................................................... 127
Summary of Country Capacities for Technology
Implementation............................. 131

11.1.1.
11.1.2. prominent features of the first world, status and evolution
11.1.2.1. science and technology
11.1.2.2. economic structure (structural break up)
11.1.2.3. the power of corporations
11.1.2.4. Mutual technology transfer (cooperation, why?)
11.1.2.5. technology exports, what and why
11.1.2.6. the virtuous cycle
11.1.3. cases of early technological developments UK, Western Europe, USA and
Japan
11.2. the active learning economies
11.2.1. catching up phenomena
11.2.1.1. initial conditions (similarity and differences)
11.2.1.2. transition state (structural change)
11.2.1.2.1. shifting focus from and to
11.2.1.3. prerequisites
11.2.1.3.1. demographic (labor force and quality)
11.2.1.3.2. infrastructure
 11.2.1.3.3. economic policy and openness
11.2.1.3.4. level of industrialization
11.2.1.3.5. political system and institutions
11.2.1.3.6. regional phenomenon
11.2.1.3.7. governance (stability, policy learning)
11.2.1.3.8. savings and investment
11.2.2. the trigger for change
11.2.2.1. innovation asymmetries
11.2.3. opportunity vs appropriate action
11.2.4. breaking through the vicious cycle and the path ahead
11.2.5. the cases of Korea, Taiwan, China, East Asian economies and India
11.2.6. the failed takeoffs, USSR and eastern Europe, China (early attempts) and
Pakistan (development is a result of a conscious effort)
11.3. slow learning economies
11.3.1. non inventive innovation
11.3.2. creative repairs
11.3.3. technology and poverty reduction
11.3.4.
11.3.5. the vicious cycle
11.3.5.1. historical background (path dependence and lock in)
11.3.5.2. level of knowledge, science and technology
11.3.5.3. economic infrastructure
11.3.5.4. demographic reasons
11.3.5.5. resource scarcity
11.3.5.6. poverty
11.3.5.7. corruption
11.3.6. the development trap and failed take offs
11.3.7. framework conditions
11.3.7.1. political stability
11.3.7.2. economic openness
11.3.7.3. geographical location
11.3.7.4. socio cultural aspect
11.3.7.5. policy making and implementation
11.3.7.6. systemic underdevelopment
escaping the trap internal and external conditions
Potential versus actual
However, closer analysis of the year-to-year changes which have occurred in the
LDCs shows that historically many LDCs have experienced short periods of rapid
growth, but these have been followed by economic crises in which there are often
quite severe output losses and economic recoveries of varying strengths and
completeness
Developing productive capacity
Developing productive capacities is the key to achieving sustained economic growth
in the LDCs. It is through developing their productive capacities that the LDCs will be
able to rely increasingly on domestic resource mobilization to finance their economic
growth, to reduce aid dependence and to attract private capital inflows of a type that
can support their development process. It is also through developing their productive
capacities that the LDCs will be able to compete in international markets in goods
and services which go beyond primary commodities and which are not dependent on
special market access preferences. to secure the fiscal basis for good governance
and to ensure effective sovereignty or face recurrent, complex humanitarian
emergencies
Benefiting from recent technological advances requires advancing towards and
crossing various thresholds in human capital, R&D and management practice, these
capacities will not emerge automatically from the workings of market forces alone,
but from the interplay of entrepreneurship, public policy and international action
Productive capacities are defined in this Report as the productive resources,
entrepreneurial capabilities and production linkages which together determine the
capacity of a country to produce goods and services and enable it to grow and
develop through three closely interrelated processes: capital accumulation,
technological progress and structural change
Capital accumulation is the process of maintaining and increasing stocks of natural,
human and physical capital through investment.
Achieving technological progress is the process of introducing new goods and
services, new or improved methods, equipment or skills to produce goods and
services, and new and improved forms of organizing production through innovation.
Structural change is the change in the inter- and intra sectoral composition of
production, the pattern of inter- and intra sectoral linkages and the pattern of
linkages amongst enterprises. The share of agriculture in GDP, industrial and service
activities are expanding, increase in industrial value-added
Such change often occurs through investment and innovation, and the emerging
production structure in turn influences the potential for further investment and
innovation.

Policy Orientation
a production- and employment-oriented approach to poverty reduction which would
encompass, rather than be narrowly focused on, increasing social sector spending
and achieving human development targets. It would also entail a development-driven
approach to trade rather than a trade-driven approach to development. An approach
to developing productive capacities which is simply trade-centric will not be sufficient
for sustained and inclusive growth
Macroeconomic policies oriented to promoting growth, investment and employment;
• A multi-level approach which not only seeks to set the framework institutions and
macroeconomic environment, but also includes policies to change meso-level
production structures and institutions, as well as micro-level capabilities and
incentives;
• An active approach to promoting entrepreneurship;
• A strategic approach to global integration in which the speed and degree of
liberalization in different economic spheres take account of the goal of developing
productive capacities. the relaxing of key constraints on capital accumulation,
technological progress and structural change
There is surplus labour, latent entrepreneurship, untapped traditional knowledge, a
vent-for-surplus through exporting and unsurveyed natural resources. Policy thus
needs to be geared to mobilizing these underutilized potentials
Within the LDCs, increasing productivity and employment for long-run sustainable
growth requires a twin strategy
of investing in dynamically growing sectors while at the same time building capacity
in sectors where the majority of labour is employed
A strategy of investing only in dynamic sectors in attempts to “leapfrog” may not be
enough to reduce poverty, mainly because the fastest-growing sectors may often not
be where the majority of the poor are employed and may require skills and training
that the poor do not possess.
The most effective approach would support and stimulate simultaneous investments
in agriculture, industry and services, along the value chain of the promising sectors,
as well as promotion of exports including, in particular, upgrading and increased local
value-added of abundant natural resources. The focus should be on triggering growth
through investment and production linkages and seeking to sustain an interactive
economic growth process through the dynamic interrelationship between the
primary, secondary and tertiary sectors. Agricultural growth linkages, in which there
is a virtuous circle in which demand stimulus from agricultural growth generates
investment, entrepreneurship and employment in non-agricultural activities,
particularly non-tradables
Poverty reduction can occur rapidly if policy catalyses and sustains a virtuous circle
in which the development of productive capacities and the growth of demand
mutually reinforce each other, and there is a transformation of productive structures
towards more skilled and technology-intensive production systems consistent with
higher valueadded activities and strong productivity growth. This will require the
building of a virtuous circle of increased savings, investment and exports through a
combination of market forces and public action. This implies mobilizing,
strengthening and transforming the enterprise sector from SMEs to larger globally
competitive enterprises, diversification of their export structures and establishing a
dense network of linkages across firms and farms, in and between both the rural and
non-rural sectors. Much of the effort will be focused on strengthening the role of
domestic enterprises.
The process requires a better balance between domestic and international sources of
growth. Increased exports and export diversification are an absolutely essential part
of the strategy. However, an exclusive emphasis on exports rather than domestic
demand, or vice versa, or on developing productive capacities in tradables rather
than nontradables, or vice versa, is likely to be counterproductive. Both matter for
growth and poverty reduction. Increased domestic demand also results from
increasing incomes and poverty reduction, and this builds a further feedback
mechanism supporting the momentum of growth as productive employment
opportunities expand.
An economic transformation process can take place only if an enabling policy
framework is put in place that would bring about the process of capital accumulation,
structural change and technological progress. This will require not only a re-
evaluation of the current national and international policies, but also the building up
of the necessary institutions, particularly the private enterprise sector (firms), and
financial and knowledge systems. In addition to the need for investment and
improvement of the physical infrastructure, economic agents themselves (firms)
need to be created or strengthened, entrepreneurship needs to be mobilized,
underutilized traditional knowledge revived and productive employment created for
underutilized labour.
Internationally it is important that the composition of aid shifts back towards the
development of productive capacities.
Increased aid for physical infrastructure — transport, telecommunications and energy
— is certainly part of this. But it is also necessary to go beyond this, and in particular,
to strengthen production sectors and linkages, and also to support enterprise
development and the improvement of domestic financial and knowledge systems.
New international support measures which can promote the development of
productive capacities in the LDCs need to be developed.
Capital accumulation
Physical domestic private investment, external capital inflows and Human capital
accumulation average number of years of schooling of the adult population minus
The brain drain
Estimates of genuine savings, which take account of capital depreciation and natural
resource
Depletion
government final consumption expenditure in the LDCs was equivalent to $26 per
capita compared with $186 per capita in other developing countries
Structural change
Labour productivity
it required 5 workers in the LDCs to produce what one worker produces in other
developing countries
the production structure of the LDCs is strongly oriented to exploiting natural
resources, so their export structure is also strongly oriented in that way
Primary Commodities
manufactured exports
manufactured exports constituted only 13 per cent of total merchandise exports
upgrading within primary commodity exports
The overall lack of structural change, the very slow rate of productivity growth and
the limited range of goods in which LDCs are internationally competitive are all
symptomatic of a lack of technological learning and innovation within LDCs
Land reform and Property rights
Lack of Critical mass in Pakistan, joining China may resolve that.. how?
The Global Technology creation, transfer and learning model

The model proposes three distinct economic and technological development System
stages experienced by the nations of the world.

The advanced or innovative state

The learning/transformation or transition state
The slow learning state or the lagging state

The three states have a dynamic equilibrium

The first and the third state are steadier while the middle state is more dynamic

Every system has its distinct features that are all mutually interrelated and
interdependent. For simplicity’s sake we start with the innovation (technology) core
of the system. As is mentioned in detail the first state has an advanced innovation
system (including innovation relevant parts of industry, university, State,
institutions and markets) where the invention and development of technologies is at
the state of the art, this state is steady and has its own dynamic relationships with
the surrounding environment or other systems. Namely Infrastructure, education,
legal, demographic, sociocultural, political, financial, and governance etc.
The interaction and interdependence of these elements is very strong and when seen
from the perspectives of growth and development, the main focus shifts from
internal dynamics of the innovation core, to the surrounding milieu.
All the three states exhibit this interaction among the systems that may act as either
barriers or drivers depending on their status.
In the advanced state the strong core is surrounded by efficient environmental
features, creating a systemic synergy, or virtuous cycle, where technologies are
created, transferred, adopted, defused and utilized, creating welfare and financial
strengths along with the most important aspect knowledge, that feeds back into the
creation of technologies and a continuity of the system is achieved.
The third or lagging state is almost the exact opposite to the first one, where the
central core is weak, incomplete, inefficient but not nonexistent. This core is
composed of the same main elements as the advanced innovation system does but
some elements are either irrelevant or too underdeveloped to be observable. Yet a
genetic code or blue print does exist, that matures through the stages of evolution of
the systems giving birth to newer aspects. For example an underdeveloped
innovation system doesn’t posses a complex knowledge creation system similar to
that of the advanced state, lack of this system results in lack of or incompleteness of
an intellectual property rights or patenting system. In contrast to the advanced
system, the lagging system is surrounded by weak systems in its environment, that
act not as drivers but as barriers to creation, transfers, absorption and utilization of
knowledge and resulting change and progress. This weak system also exhibits a
steady state, where weak education, lack of governance, missing infrastructure,
financial weakness and political instability simply keeps weighing down the progress
and development.
What is important to notice here is that the advanced and the lagging systems are in
continuous interaction and with the rise of globalization their interaction is getting
more and stronger. International trade in good sand services, unrestricted flow of
finances, rise of communication technologies and migration of people are a few
aspects that not only impact the elements of systems environment but also carry the
technologies and knowledge among the systems. These interactions have dual effects
on the systems, positive and negative. Trade of high value added products or
technologies from the advanced side to the lagging side, provides a vital source of
technological advancement of the lagging system through learning the embedded
and embodied knowledge in the products from the advanced systems. But the
lagging systems exports of commodities and low value added products fetched much
less a price in comparison to the high tech imports, this deprives the lagging system
from financial freedom to develop and grow. Although investment and aid could
offset this effect to a certain degree the advantage of setting the rules of the game,
posses by the advanced system compounded by serious absorption capacity
limitations of the lagging system results in a over all weakening of the lagging
system and widening of the technology and development gap. The term vicious cycle
best describes the status of the lagging economies, and its not just their internal
systemic weakness but its also the effect of their interactions with the advanced state
nations. There are numerous interactions and complex effects but in almost all cases
the advanced and the lagging systems exhibit a steady state of increasing prosperity
and worsening poverty at the two extremes.
However there exists an intermediate state the catching
up/learning/modernizing/fast developing state. A few nations from the lagging state
group have been able to break out of the technological and economic backwardness
trap and embarked on a course of fast development and catching up. This state is
very dynamic, marked by high growth rates, structural change, infrastructure
construction, establishment of institutions as well as their creative destruction. The
central innovation core of the system exhibits emergence of a learning system,
composed of the elements of absorption and diffusion end of the innovation process.
This system is usually not stable without the rise of an innovative part, and as the
system matures the innovation or knowledge creation components start emerging
and strengthening. Ultimately completing the innovation core and development of
the environmental factors to a state similar to that of the advanced level. The
environment elements as mentioned above are very tightly connected with the core,
and thus exhibit a similar pattern of change and development.
Internal change
Interaction with the advanced.
Interaction with the lagging,

The opportunity for the lagging from the transforming//