Technological accumulation is essential for poverty reduction in the least developing
countries (LDCs). Yet, it has been virtually absent in most of these countries and highly
uneven in those countries that have some knowledge accumulation. Acquiring and improving
the technological capability to absorb knowledge that already exists in the global economy
will help a great deal in alleviating poverty. But it will be a long and difficult process that
will involve complex and diverse activities between users and producers and between firms
and organizations. Even if existing technology would become more easily available in global
markets, the cost and risk of transferring and absorbing technology would be much higher in
these countries than elsewhere (Lall and Pietrobelli, 2002). This essay considers the potential
role that technological learning and technical change can play in alleviating poverty in the
LDCs.
The basic argument of this essay is that social and technological capabilities are the
main driving force behind for structural change, opportunities for international trade,
improvement in international competitiveness, and the growth of national income (Dahlman
and Nelson, 1995). Developing countries that have achieved rapid rates of productivity
growth in recent decades have done so by learning to use and improve existing technologies
and to integrate them into their productive activities. To accomplish this, they introduced
policies that facilitated access to new technology, invested heavily in education and skills
formation, provided temporary protection and subsidies to allow domestic producers to
accumulate technological capabilities, provided institutional support for the innovation
system, and supported research and development (R&D) activities (Landes, 1998; Chang,
2004).