| Developing countries have the potential to grow fast on the basis on technologies taken over and adapted from more developed countries. By realising this potential, economic growth can be accelerated as evidenced by a number of Asian economies in the past. However, it is also clear that technology adoption crucially depends on the social and technological capabilities of the country. This project aims to measure productivity and its sources of growth in three major developing countries (India, Indonesia and South Korea) and relate them to domestic technological capabilities, on the one hand, and to national and international technology spillovers, on the other hand. The starting point is an extended growth accounting methodology at industry level to explain the acceleration trends in output growth in the countries. With this methodology changes in volumes and quality in the inputs and the effects of substitution between these inputs can be distinguished. In a second step, productivity growth, which can be interpreted as the part of output growth that cannot be internalised by the investor, is related to the domestic technological efforts and the size of national and international technology spillovers as measured in various ways. Finally, the institutional framework related to technology adoption and diffusion will be described and policy recommendations derived. |
