Innovative Asia: Advancing the Knowledge-Based Economy - The Next Policy Agenda

This study outlines policy actions required in developing countries of Asia to advance as knowledge-based economies. The study uses the four pillars of the Knowledge Economy Index to benchmark the performance of developing economies in Asia against advanced economies of the world. It analyzes opportunities by which Asia’s middle and low income countries can tap new technology trends to move up global value chains and towards high-income levels.

Highlights

Developing Asia at present has multiple opportunities and pathways to pursue Knowledge-Based Economy (KBE) development. Each economy needs to shape its priorities and pathways based on its own factors and unique attributes. This report suggests that there are three general ways in which emerging economies of Asia and the Pacific can pursue KBE development in the current times:

• The first is learning from the KBE journey of advanced economies and making appropriate investments to catch up on lags and gaps and undertake policy reforms. This report benchmarks the state of play of the four pillars of the KBE in selected economies of Asia. The KBE journey of advanced countries, particularly the Republic of Korea, Finland, and Singapore, and key milestones of policy development are discussed to draw specific lessons for developing Asia;
• The second is exploiting the unique strengths and advantages of the Asia and Pacific region by pursuing strategies that amplify such strengths. These include demographic advantages of youthful populations in some of the countries, a large and growing middle-income population and expanding domestic consumer markets, competitiveness in the services sector and creative industries, and strong capabilities in IT and IT-enabled services; and
• The third is leveraging game-changing trends in technology and business processes that can accelerate KBE development and enable emerging economies to even leapfrog technology cycles and catch up with the latest, such as putting mobile technologies to use more strongly for development, investing in cloud computing, using IT in manufacturing, and speeding up innovations for bottom-of-the-pyramid markets.