Globalization, Economic Development and Inequality

Globalization, Economic Development and Inequality

An Alternative Perspective

New Horizons in Institutional and Evolutionary Economics series

Edited by Erik S. Reinert

The expert contributors gathered here approach underdevelopment and inequality from different evolutionary perspectives. It is argued that the Schumpeterian processes of ‘creative destruction’ may take the form of wealth creation in one part of the globe and wealth destruction in another. Case studies explore and analyse the successful 19th century policies that allowed Germany and the United States to catch up with the UK and these are contrasted with two other case studies exploring the deindustrialization and falling real wages in Peru and Mongolia during the 1990s. The case studies and thematic papers together explore, identify and explain the mechanisms which cause economic inequality. Some papers point to why the present form of globalization increases poverty in many Third World nations.

Chapter 9: Information Technology in the Learning Economy: Challenges for Developing Countries

Dieter Ernst and Bengt-Åke Lundvall

Subjects: economics and finance, evolutionary economics, welfare economics


Dieter Ernst and Bengt-Åke Lundvall The engine of growth should be technological change, with international trade serving as a lubricating oil and not as fuel. (Lewis 1978, p. 74) Both the pace and the acceleration of innovation are startling; nay terrifying . . . No one can predict the . . . range of skills which will need to be amassed to create and take advantage of the next revolution but one. (And thinking about the next but one is what everyone is doing. The game is already over for the next.) (Anderson 1997) Research in industrialized countries has shown that the ability to learn determines the economic success not only of firms and industries but also of whole regions (industrial districts) and countries (OECD 1996a, 1996b, 1996c). This has given rise to the concept of the learning economy, which is based on the following propositions (Lundvall and Johnson 1994; Lundvall 1994, 1996): learning is an interactive, socially embedded process; its efficiency depends on the institutional setup, the national innovation system. The content of the knowledge generated through learning is critical: tacit knowledge is essential for adjusting to change (flexibility) and for implementing change (innovation). This chapter inquires how the concept of the learning economy can be applied to the requirements of developing countries (DCs). Its main purpose is to develop an analytical framework for understanding how learning and capability formation can foster industrial upgrading, with special emphasis on the spread of information technology (IT). Under what conditions can DCs use this set of...

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