Knowledge is the key to economic prosperity. Technologies, innovations and practical knowledge (know-how) are the result of learning about new possibilities for the production of necessary goods and services. Knowledge is also an archetypal "public good": new ideas can be useful to everyone. Unless states and monopolies restrict access, ideas will not be consumed by use. This is especially important for poor countries, because they do not have to invent from scratch the invented. They can simply adopt technologies and methods developed by richer countries to boost their own economic development.
Economists and public policy makers have always emphasized the economic importance of knowledge, but so far they have not paid enough attention to the circumstances that make knowledge useful. Context is very important: inconsistencies between the circumstances under which some ideas were created and the particular circumstances in the place where they are applied diminish the value of the transmitted knowledge.
For example, corn is grown everywhere, but in different parts of the world it is exposed to different threats depending on the local environment and ecology. As expected, research is primarily focused on pests common in North America and Europe. We have thousands of biotech patents for the control of European corn borer and only 5 unique patents for protection against the African stem borer that attacks crops in sub-Saharan Africa.
After studying many such examples, Harvard economists Jacob Moscona and Karthik Sastry came to the conclusion that the lack of adaptation of technologies developed in advanced economies can be an obstacle to the growth of agricultural production productivity in low-income regions. According to their analysis, 15% of the disparity in global productivity can be explained only by the lack of adaptation of technologies in the field of pest and pathogen control in agricultural production.
At a panel discussion organized by the International Economic Association, Moscona and other participants offered several examples of non-adaptive technologies. UCLA's Mireille Camariza noted that the development of diagnostic technologies for tuberculosis and other infectious diseases affecting low-income countries lags behind the development of diagnostic technologies for diseases prevalent in rich countries.
When the pandemic hit rich countries, hundreds of diagnostic tests appeared on the market in a few months. On the other hand, it took a century for similar progress in diagnosing tuberculosis. Also, advanced diagnostic tests for tuberculosis require the presence of trained technicians and electricity, which is not available in some regions.
Similar differences can be observed even within the same country, in cases where technologies adapted to the interests of certain groups are given priority over others. Automation and digitization, for example, can produce unwanted effects for large numbers of workers, making them maladaptive. Anton Korinek from the University of Virginia notes that innovations are a double-edged sword: they can increase aggregate productivity and at the same time produce sharp redistributive shifts in favor of capital owners. If the overall gain from productivity growth is not large, the benefit of the innovation is canceled out by negative redistribution (from the community's point of view) - what economists Daren Acemoglu and Pascal Restrepo describe as "not very desirable" innovations.
Robots are a good example of negative shifts to the detriment of workers, and artificial intelligence is expanding the domain of areas where distributive conflicts will deepen. As Korinek notes, software that replaces people with qualifications lower than a university degree increases profits for AI engineers and company owners. The consequences will be even more pronounced in developing countries where cheap labor is their only comparative advantage.
Knowledge is embedded not only in seed material and software but also in cultural norms. On the aforementioned panel, economist Nathan Nunn spoke about time mismatches, when knowledge and practices that were once adequate lose functionality over time. Cultural traditions transmit useful knowledge to new generations. Religious rituals, for example, help coordinate agricultural work. Some food preparation techniques that the elderly pass on to the young protect them from toxins. But changes in culture happen very slowly, so sudden social changes produce "evolutionary maladjustment".
Drawing on research conducted in collaboration with Leonard Wantchekon, Nunn cites the example of the traumatic experiences of Africa during the period of the transcontinental slave trade. The communities in Africa that had the most contact with the slave traders developed a deep distrust of foreigners, which produced a culture that hinders the development of a successful market economy in today's world. Likewise, Americans' aversion to income redistribution appears to be more a result of their country's past high economic mobility than its current reality.
Whether they occur in the form of unadapted technologies or cultural practices, such mismatches must be taken into account if knowledge is to truly benefit society. One of the possible strategies is the development of awareness. Thus, the ecological movement managed to redirect the demand from fossil fuels to the development of renewable energy sources. A similar movement that will put "technology at the service of workers" can redirect innovation in a more favorable direction. Giving a voice to all relevant stakeholders in innovation and technology decision-making - including workers and poor countries - would protect us from the harmful effects of unsuitable technologies.
Public policies are also important. The Green Revolution in the 20th century was initiated by the clear understanding that increasing the productivity of agricultural production in low-income countries implies the development of new high-yielding species suited to tropical conditions. Although there is no similar multilateral initiative to solve technology problems in today's world, Moscona emphasizes that several middle-income countries (India, Brazil, South Africa) have the capacity to develop technologies appropriate to the needs of developing countries.
But even in those countries, innovators tend to start from the norms and preferences of Silicon Valley rather than the needs of the local community. Policy makers and innovators must not forget that knowledge, in order to empower us, must be useful.
(Project Syndicate; Peščanik.net; translation: M. Jovanović)
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