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TitleBuilding Knowledge Economies
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Total Pages212
Table of Contents
Introduction: Knowledge—The Heart and Mind of Economic Development
1. Toward Knowledge Economies: Global Trends and Issues
	A Brief Historical Retrospective
	Knowledge as the Foundation of Development
	How Knowledge Reshapes Economies
	Challenges and Opportunities
2. The Knowledge Economy: Analytical Framework and Benchmarking Elements
	A Four-Pillar Framework
	Measuring and Benchmarking Knowledge-Based Economies
	The Knowledge Economy and Economic Performance
	Annex 1 The Knowledge Assessment Methodology
	Annex 2 The Knowledge Economy and Economic Growth: Econometric Calculations
3. The Process of Building a Knowledge Economy
	Drawing on the Lessons of Success
	Adopting Conducive Attitudes
	Adapting Policy Actions to Development Levels
	Managing Reform Processes
	Exploiting Entry Points: Driving Sectors and Cities
	Dealing with a Country’s Context
4. Improving the Economic and Institutional Regime
	General Considerations of Governance and Business Climate
	Obstacles to Business Development
	Clusters and Related Measures
	Local Reforms
5. Fostering Innovation
	General Considerations
	The Institutions and Instruments of Innovation Policy
	Stimulating and Supporting Innovators
	Research and Technology Infrastructure
	Programs for the Diffusion of Basic Technology
	Export Sector Policies
	Intellectual Property Rights
6. Strengthening Information and Communication Infrastructure
	A Holistic Approach
	Key ICT Dimensions
	An Enabling Environment
	Developing ICT Skills
	Evolving Agendas
7. Upgrading Education
	Basic Education
	Tertiary Education
	Lifelong Learning
	Governance of Education Systems
	International Mobility of Human Resources
8. Strategic Directions for Selected Countries and Country Groups
	China and India: The Emerging Giants
	Active Reformers
	Economies with Untapped Potential
	Low-Income Beginners
Conclusion: Moving Ahead to a Knowledge Economy
	Putting KE at the Heart of Development Strategies
	Adapting KE Policies to Country Specificities
	Acting Ambitiously on the Four KE Pillars
	Making the State and Institutions Responsive to KE Needs and Opportunities
	Epilogue: Better Knowledge and Understanding of Society for Promoting Knowledge Economies
Appendix: World Bank Publications on the Knowledge Economy
	1.1 Theories of Growth: Integrating Knowledge in Economic Models
	1.2 Why Growth Performances Differ: Total Factor Productivity
	1.3 The Green Revolution in India
	2.1 Knowledge and Growth—Empirical Evidence
	2.2 Other Benchmarking Methodologies: WEF and UNIDO
	3.1 Vietnam’s Development and KE Elements
	3.2 Botswana: Investments Supporting KE Development
	3.3 Chile: Exemplary KE Efforts, but a New Push Needed
	3.4 Key Bodies for KE Reforms in Finland
	3.5 Korea’s KE Transition: Bottom-Up Initiatives and Government Action
	3.6 Dubai’s Transition to a Knowledge Economy
	3.7 Differences between Eastern and Western Cognitive Processes
	4.1 Improving Governance in Low-Income Countries
	4.2 Success in Achieving Significant Economic and Institutional Reforms: The Case of Botswana
	4.3 Obstacles to Firm Growth in Developing Countries: What Are the Binding Constraints?
	4.4 Successful Deregulation in Mexico
	4.5 Creating a Venture Capital Industry: The Network of Overseas Chinese
	4.6 What the 1990s Revealed about Trade Reforms
	4.7 Public Policies That Encourage Cluster Development
	4.8 China’s Special Economic Zones
	5.1 Pride of Place: Innovating Successfully in Rural Areas
	5.2 Ireland’s National Linkage Program, 1987–92
	5.3 The Institutional Features of Finland’s Innovation Policy
	5.4 Innovation Policy Schemes in OECD Countries
	5.5 India’s Council of Scientific Industrial Research: From Self-Sufficient Technological Development to Competitive Market-Driven R&D
	5.6 The Malaria Research and Training Center of Bamako University in Mali
	5.7 Basic Technology and Capacity-Building in Rwanda
	5.8 The Fundación Chile Model for Promoting Innovation
	5.9 Open Source Software: An IPR Regime Friendly to Developing Economies
	6.1 “e–Sri Lanka” and a Holistic Approach to ICT
	6.2 Using “Older” ICT in Three Countries
	6.3 Rwanda: ICT Vision and Leadership
	6.4 Overcoming Capacity Constraints for Telecommunications Reform in Mauritania
	6.5 The Impact of Effective Regulation in Morocco
	6.6 The Chilean Telecommunications Development Fund
	6.7 Using ICT to Improve the Delivery of Services to Rural Populations in India: Three Examples
	6.8 Brazil and the Internet
	6.9 Estonia: Applying the “e” to All Aspects of Life and Work
	6.10 Developing the IT Skills of Poor Women in Kerala
	7.1 The Education for All–Fast Track Initiative
	7.2 Higher Enrollment and Better Learning Outcomes in Ghana
	7.3 Multilingual Education in Africa
	7.4 Colombia’s Telesecundaria: Reaching the Rural Poor
	7.5 The Jordan Education Initiative: New Methods for Improved Teaching
	7.6 Vocational Education and Training in the Informal Sector
	7.7 Mozambique’s Tertiary Education Reforms
	7.8 Millennium University of the Monterrey Institute of Technology in Mexico
	7.9 Use of Educational Television in India, Brazil, and Mexico
	7.10 School Management and Student Performance: Results from PISA
	7.11 Initiatives to Encourage Highly Skilled Migrants to Return Home
	7.12 The Global Scot Network
	8.1 Lifelong Learning in China: The Need for a Broad Action Plan
	8.2 Bangalore’s Innovation System
	8.3 Malaysia’s Multimedia Super Corridor and Expansion Project
	8.4 Tunisia: Developing Technopoles
	8.5 Mexico’s Monterrey Urban Cluster
	8.6 Mendoza’s “New Industrial Policy”—Public–Private Institutions Providing Public Goods and Services
	8.7 Bangladesh: Reforms and Industrial Development
	8.8 Research and Innovation in Francophone Africa—Some Examples
	1.1 Time, Substance, Life, and Energy: An Evolution Through Time
	1.2 World Growth in Key Information and Communication Technologies, 1991–2004
	1.3 GDP Growth in Republic of Korea and Ghana over 50 years
	1.4 Growth in World Trade in Manufactures, by Level of Technology of Traded Goods, 1994–2003
	1.5 The Growing Contribution of Services to GDP
	1.6 The Rise of Human Capital
	1.7 Changes in Job Tasks and Skill Demands in the United States, 1960–98
	1.8 Investment in Knowledge as a Share of GDP, 2002
	1.9 Contribution of Intellectual Assets to U.S. Market Value, 1982–2002
	1.10 The New Competitive Arena
	1.11 Uneven Innovation Underlying Fluctuations in Total Factor Productivity and Economic Growth
	1.12 Mobile Telephone Subscribers per 100 Inhabitants, by Region, 1994–2004
	1.13 Average Annual Growth of Internet Users per Capita
	1.14 Typical Division of Labor in Global Production Networks
	2.1 The Economic Dividend of Good Public Governance
	2.2 The Four Interactive Pillars of the Knowledge Economy
	2.3 Human Capital and FDI Performance
	2.4 Knowledge-Based Competitiveness and Growth
	2.5 The KAM Basic Scorecard for China and India
	2.6 Relative Performance Over Time of Selected Countries on the Knowledge Economy Index
	2.7 The Knowledge Economy and Current Economic Performance
	2.8 Country Scores on the Knowledge Economy Index in 1995 Correlated with Future Economic Growth
	2A1.1 Basic Scorecard (Diamond Chart): Slovak Republic
	2A1.2 Custom Scorecard: The Education Pillar in Estonia and Europe and Central Asia
	2A1.3 Custom Scorecard: The Information Infrastructure Pillar in Finland, Korea, and South Africa
	2A1.4 Relationships of KAM Indexes and Indicators
	3.1 Enrollment Rates in Korea, 1970–2004
	3.2 The Stages of Industrial and Economic Development in Finland
	3.3 Time Sequencing to Create a Virtuous Cycle of Change
	4.1 How Do Firms in Developing Countries Rate Various Investment Climate Constraints?
	4.2 More Competition Means More Innovation
	4.3 Poor Countries Regulate Business the Most
	4.4 Different Cluster Actors
	5.1 Structure of Industrial Technology
	6.1 Prerequisites for Capturing ICT-Induced Benefits
	7.1 Trends in Gross Secondary Enrollment from 1995 to Most Recent Year
	7.2 Some Countries Achieve Both High Performance Standards and Equitable Distribution of Learning Outcomes
	8.2 Stylized Structure of the Indian Economy
	8.3 Inward FDI Flows: India and China
	8.4 WEF Growth Competitiveness Index Rankings: Active Reformers
	8.5 Improvements in the Knowledge Economy Index in Eastern Europe, 1995–2005
	8.6 Economies with Untapped Potential as Revealed by the Knowledge Economy Index
	8.7 Economies with Untapped Potential as Revealed by the Knowledge Index
	8.8 Hierarchical Design and Sector Separation in the Soviet Innovation System
	8.9 Benchmarking the Economic and Institutional Regime (EIR) in Selected African Countries and Comparators
	8.10 Adult Literacy Rate in Selected African Countries, 1990–2004
	8.11 Gross Postsecondary Enrollment Ratio in Selected African Countries, 1991–2004
	8.12 Telephones (Mainlines and Mobile Phones) in Selected African Countries, 1990–2004
	8.13 Personal Computers in Selected African Countries, 1990–2002
	1.1 Knowledge and Natural Resource Rents
	1.2 Job Creation by Knowledge Content of Sector in the United States and Europe, 1995–2005
	2.1 KAM Basic Scorecard Variables
	2A2.1 Knowledge and Economic Growth, Dependent Variable: Growth Rate of Real GDP per Worker
	2A2.2 Knowledge Effects on Economic Growth by Income Category, Dependent Variable: Growth Rate of GDP per Worker
	3.1 Stages of Economic Development in Korea
	3.2 A New Mindset for Government Action
	3.3 KE-Related Government Action at Four Development Stages
	3.4 East-West Contrasts in Economic Systems
	4.1 Some Simple Solutions to Overregulation
	5.1 Policy Instruments Suitable for Stimulating Enterprise Innovation
	7.1 New Competencies for the Knowledge Economy
	7.2 Priorities for Educational Policies: An Overview
	7.3 Achieving a KE Advantage in Vocational Education through Decentralization
	7.4 Higher Education Policy Requirements for the Knowledge Economy
	7.5 The Traditional versus the New Role of Education Governance in the Knowledge Economy
	8.1 Education Levels of Chinese Labor by Region, 2004
	8.2 Comparative Innovation Performance: India and China
	8.3 Eleven Enterprise Clusters in Africa
Document Text Contents
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Page 106

Table 5.1 Policy Instruments Suitable for Stimulating Enterprise Innovation

Segment of the domestic
enterprise sector Policy objectives Policy instruments

Low-technology SMEs
and microenterprises

Business: Stabilize businesses and build
competitive capabilities.
Innovation: Build awareness of scope and
benefi ts of innovation

• Business advisory and support services; SME and microenterprise support

• Finance (including microfi nance)
• Management and skills development
• Innovation awareness and understanding
• Productivity-enhancing services
• Innovation identifi cation and matchmaking
• Cluster-based approaches to stimulating innovation

SMEs with modest

Business: Develop competitiveness.
Innovation: Introduce basic innovation
skills. Encourage adoption and application
of new ideas

• Support for business development, diversifying customer base
• Product diversifi cation and quality improvement
• Management and skills development
• Internet-based information services
• Technology awareness and marketing
• Support for technology adoption and adaptation projects
• Graduate internship and placement programs
• Consultancy and technical assistance support


Page 107

Segment of the domestic
enterprise sector Policy objectives Policy instruments

competent enterprises

Business: Support market development,
internationalization of businesses.
Innovation: Build in-house innovation

• Business development, export market support
• Internet-based information services
• Innovation and technology support
• Technology transfer support
• Incubators and technology parks
• Linkages with academic researchers
• Innovation relay centers, matchmaking services
• Laboratory services and metrology
• Graduate internships and placements
• Consultancy and technical assistance support for commercialization,

intellectual property rights, licensing, patenting, etc.
• Technology joint ventures

R&D-rich enterprises Business: Develop international markets,
promote entry to global supply chains
Innovation: Encourage R&D, engagement
with international innovation networks,
and technology transfer and diffusion

• Export support
• Technology support
• Support for participation in international R&D networks such as the EU 6th

Framework Program
• Technology and other innovation-based spin-offs
• University-industry collaboration
• Support for commercialization

Source: Authors.

Table 5.1 Continued


Page 212


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Institute designs and delivers courses and

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WBI works with policy makers, technical

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WBI’s activities are carried out face-to-face in

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