Technology and innovation
Innovation and technological change are powerful drivers of economic growth. This
has been the case in the past, is a salient feature of the world today, and will no doubt
continue to be so in the future. What is particularly notable about today’s environment
is the rapidity with which innovations spread into mass use.
There are few areas of modern life, from health to transport, and few workplaces
and production processes, from agriculture to construction, where goods and services
alike have not been subject to constant innovation and improvements.
Possibly the most emblematic innovations of recent years are those linked to
microprocessing chips. The mobile phone appeared in the early 1980s. The International Telecommunications Union estimates that in 2008 mobile phone and fixed
broadband penetration in developing countries had reached the level found in Sweden
only a decade earlier. In 2009 an estimated 26 per cent of the world’s population (1.7
billion people) were using the Internet.
These trends are reflected in both output and trade. The value of world trade in
information and communication technology (ICT) goods increased from US$1,000
billion in 1996 to over US$3,500 billion in 2007. Non-OECD countries were responsible for nearly half the 2007 total, compared to just 15 per cent a decade earlier
(OECD, 2008).
Innovation and technology translate into investment in fixed capital and in workforce and entrepreneurial skills which in turn lead to higher productivity. Countries with
lower levels of economic development accordingly display lower levels of output per
worker. However, these countries also tend to register more rapid increases in output
(figure 2).
Rapid innovation will continue to characterize investments as enterprises expand
into new products and services. While the pace of change may be faster in emerging economies,
the more advanced countries will seek to keep their competitive edge
through investment in innovation.
In all countries the implications for skills development are momentous. Many of
the jobs that will be generated over the next two decades do not exist today; yet most
of the workforce of those years is already in education and training. Even so, the need
to upgrade skills applies not only to young people in schools, universities and training
institutions, but also to the current generation of workers
