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Frontier technologies are redefining the world

A team of experts from the Philippines department of agriculture use drones to gather visual data on damaged rice crops in the Pampanga province. / © FAO/Veejay Villafranca. Source: UNCTAD.

A few developing countries are outperforming in adopting new technologies such as blockchain, robotics, 5G or artificial intelligence (AI). However, most are still trailing behind and risk missing out if they don’t build the required skills, a UN report has warned.

The United Nations Conference Trade and Development (UNCTAD) Technology and Innovation Report presented last week assesses the progress of 158 countries in using so-called frontier technologies, such as nanotechnology, the internet of things, drones, or 3D printing, and taking into account their physical investment in those fields, human capital and technological effort.

The economies most ready for these rapidly changing technologies are in Northern America and Europe, while those least ready are in sub-Saharan Africa and other developing regions. The report stresses the importance of catching these technological waves.

Isabelle Durant, acting UNCTAD secretary-general, said:

“It is key that developing countries do not miss the wave of frontier technologies, otherwise it will further deepen inequalities. Hence, societies and productive sectors need to be well prepared and build the required skills.”

As the developing technologies represent a $350bn market today that could grow to $3.2 trillion by 2025, the acceleration is real. But so is their potential in being transformative for the better, the report says.

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Market size estimates of frontier technologies, $billions. Source: UNCTAD.

The situation around the world. Although some developing countries overperform on frontier technologies, most are behind Northern America and Europe, according to the report’s “country readiness index”, which scores countries based on measures including technology deployment, skills, research and development (R&D), industry activity and access to finance.

Many of the major producers are located in the United States, as the country is home to important cloud computing companies. Despite the fact that only a few countries currently produce frontier technologies, all countries need to prepare for them, the report continues, as they are redefining the world, especially in a post-pandemic future.

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Country index readiness. Source: UNCTAD.

The index indicates the readiness of the United States, Switzerland, most of the European countries, Singapore and the Republic of Korea, but also places China and India in a closely competing position.

This means that some countries perform better than their per capita GDPs would suggest, the report explains. In other words, they overperform. India’s position, according to the index, is 43, while its estimated place was 108.

One of the explanations can be reflected in their “abundant supplies of qualified and highly skilled human resources available at a comparatively low cost”. Plus, its large local markets attract investments by multinational companies.

What about the countries on the lower end of the index? Catching up requires a deep understanding of the risks and opportunities of the technologies in combination with a constructive global policy. Shamika N. Sirimanne, director of UNCTAD's division on technology and logistics, explains:

“Governments in developing countries have a very big role to play to create an enabling environment so that private sector can adopt and adapt these technologies for local conditions. Universal internet access, skills development, social protection, appropriate regulations are all part of this package. The private sector in developing countries will not invest in risky new endeavors that use frontier technologies if conditions are not right—to survive and thrive.”

Frontier technologies at work. Innovation brings change and can affect the labour market, affecting profits, jobs, and wages. Its impact will depend on several factors such as productive structure, demographic makeup, levels of development and social and economic policies.

One of the major concerns today is the impact of AI and robotics combined with big data and IoT, the report explains. The risk could be that technologies will replace certain jobs and encourage the growth of the gig economy associated with low wages and job insecurity. Another fear is the risk of widening the already existing technological gap with developing countries, thus creating more global inequality.

Innovation with equity. Frontier technologies can contribute to people’s safety and the protection of the environment. AI and big data have, for example, been used during the pandemic to monitor outbreaks, track and trace cases, and assess risks of infection.

The examples extend to developing countries, Sirimanne argues:

“There are good examples of using IoT to monitor ground water contamination, use of drones to deliver medical supplies to remote communities, using big data to track diseases. But most of these examples remain at pilot level, without ever being scaled-up to reach those most in need, the poor. To be successful, technology deployment must fulfill five A’s: availability, affordability, awareness, accessibility, and the ability for effective use.”

This highlights the importance of fighting an inequality, that also resides in technological design and access, or risks of biases and discrimination. Therefore, UNCTAD encourages public policies to guide innovation in new technologies to support sustainable development goals.

Governments in collaboration with the international community can set up inclusive dialogues about technological changes and impacts on society in order to define appropriate governance frameworks.

Future of equitable outcomes. National governance, international cooperation and social activism are key to sustainable and inclusive developments, the UNCTAD report concludes. Developing countries in particular need to strengthen their innovation systems to absorb these technologies through a whole-of-government approach, as opposed to working in silos, Sirimanne explains. What’s more, aligning science, technology and innovation (STI) policies with industrial policies can help accelerate that transformation.

“New technologies can re-invigorate traditional production sectors and speed up industrialisation and economic structural transformation”, Sirimanne adds.

The international community can also play its part, says the report, and can do so through measures including building stronger national capacities in STIs, sharing technology processes, increasing women’s participation in STEM, improving technological assessments and encouraging inclusive debates.

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