The Critical Role of Technology and Technology Policy

Technology is the practical application of sciences to industry or commerce and requires some specialized expertise to address a particular need. Technology and the process of industrialization bring about social and economic integration as people from different areas and backgrounds collectively engage in productive activities that require teamwork and collaboration. Technological progress occurs according to the laws of natural selection whereby new technologies replace older ones and new, efficient, and better products substitute for mature ones. The winners are those firms that produce competitive products that meet the expectations of the market. Developing countries must pursue technology policies that contribute to enhancing domestic technological capability. Key indicators of science and technology investments include scientific publications, R&D expenditures, patent filings, and venture capital deals. Innovations rooted in developing countries have the advantage of fitting the specific needs of low-income consumers and can result in higher demand in local and foreign markets. Such innovations can support the development of low-income countries and hasten the speed of industrialization and catch-up. However, at present, many countries face the twin dilemmas of unsupportive government policies and less focused/less knowledgeable firms on/about innovation.