Human Development Report 2001
"Making New Technologies Work For Human Development"
http://www.undp.org/hdr2001/

United Nations Development Programme, New York, 2001, 264 pages

Review by Madanmohan Rao (madan@inomy.com)

"Development and technology enjoy an uneasy relationship: within development circles there is a suspicion of technology-boosters as too often people promoting expensive, inappropriate fixes that take no account of development realities," begins UNDP administrator Mark Malloch Brown in the foreword to the organisation's 11th annual report.

Yet, the development community would be ill advised to ignore the explosion of technological innovation in food, medicine and information which - if properly harnessed - could indeed transform the lives of a wide section of society.

This hefty 264-page guidebook is chock-full of facts, figures, charts, tables and statistics on a wide range of parameters ranging from IT diffusion and gender empowerment to energy consumption and medical health care levels. The focus of this year's report is on advances and policy responses in the Internet, biotech, and pharmaceutical sectors.

"Technology can be not just a reward of successful development but a critical tool for achieving it," argues Brown. We are living in a time of unprecedented global scope, speed and collaboration in new innovation - as well as growing public controversy over issues like transgenic crops.

Technology networks are transforming the traditional map of development, expanding people's horizons and creating the potential to realize in a decade progress that required generations in the past. But to truly harness this wave requires a process of knowledge creation and capacity building in developing countries to decrease technology divides.

The material is divided into five chapters, covering human development distributions, Internet diffusion, technology risk management, national policy formulation, and global governance.

1. Human Development: The Track Record

At the UN Millenium Summit, world leaders set specific goals and timelines for eradicating poverty and hunger, protecting the environment, improving school enrollment levels, reducing mortality, and reversing the spread of HIV/AIDS.

Of the 4.6 billion people in developing countries, more than 850 million are illiterate, a billion lack access to improved water sources, 2.4 billion lack access to basic sanitation, 11 million children under the age of five die each year, 1.2 billion live on less than $1 a day, and 2.8 billion live on less than $2 a day. The richest 1% of the world's people receive as much income as the poorest 57%.

In terms of human development over the past 30 years, some countries have made impressive overall progress and are well suited to the information age, such as South Korea and Costa Rica - thanks to emphasis on school enrollments and high-speed Internet access in schools.

The book has dozens of pages of tables and charts focusing on the human development index (calculated from dimensions like longevity, knowledge, and living standards), human poverty index, and gender empowerment measure.

Many countries are now producing their own human development reports; some states and provinces are producing their own local reports as well, such as Madhya Pradesh and Gujarat in India.

2. The rapid but unequal rise of the Internet and biotechnology

Technology has been at the heart of human progress, and has been a key feature of human identity and progress right from the days of the printing press and penicillin. Technology diffusion has also been accompanied by massive media and promotional campaigns, as with the use of oral rehydration therapy and new immunization measures.

20th century technologies not only improved health standards and food production worldwide, but also had multiplier effects across income levels and innovative capacity. Technical progress accounted for 40-50% of mortality reductions between 1960 and 1990. But today's technology transformations are more rapid than in the past, especially in ICT areas like processor power (Moore's law), memory storage, bandwidth (Gilder's law), and telecom costs.

Their impacts are profound as well: faxes were used heavily during the fall of communism in 1989, email helped expose corruption in South Korea during the 1999 elections, and SMS (Short Messaging Services) as well as email played a big coordinating role in the fall of Philippine President Joseph Estrada in January 2001.

Global spending on ICT - projected to reach $3 trillion by 2002 - also opens up niche opportunities for service providers in developing countries. For instance, India's IT revenues rose from $150 million in 1990 to $4 billion in 1999. The global outsourcing market is worth more than $100 billion, and over 185 Fortune 500 companies are outsourcing software requirements to India. India now has 1,250 companies exporting software.

The Internet - with a projected billion users in 2005 -- is breaking geographical boundaries, making markets more efficient, and opening up global employment opportunities. Initiatives like HealthNet assist thousands of healthcare professionals in developing nations.

Global revenues in Internet commerce are expected to reach $233 billion in 2004 for B2C e-commerce and $10 trillion by 2003 for B2B e-commerce. In OECD countries like the U.S., the ICT sector accounted for about a quarter of output growth in the 1990s, and raise productivity in traditional sectors. The impact has not been as dramatic in other countries, partly because widespread benefits of the Net may come only when its penetration reaches 50% of the economy.

But though the market is a powerful engine of technological progress, it is not powerful enough to create and diffuse the technologies needed to eradicate poverty.

There are still huge North-South gaps, and divides within North and South as well. OECD countries, with 19% of the world's population, accounted for 91% of the 347,000 new patents issued in 1998. In these countries, more than 60% of R&D is now carried out by the private sector.

As for Internet disparities, Africa has less international bandwidth than Sao Paulo; Latin America itself has less bandwidth than Seoul. Bangalore has become a major IT hub, but much of the rest of the country has very low teledensity and energy support.

Seventy-nine percent (79%) of Internet users live in OECD countries today, which contain only 14% of the world's population. A strong urban bias still exists for the Net in developing countries. The gender imbalance is reducing in developing countries like Thailand (49% female users in 1999) and Brazil (47% female users), but is strong in China (70% male users) and Senegal (83% male users).

Monthly Internet access charges amount to only 1.2% of average monthly income for a typical U.S. user - compared to a staggering 614% in Madagascar, 278% in Nepal, 191% in Bangladesh, and 60% in Sri Lanka. Telecentres, Internet kiosks, and cybercafes will thus play a key role in Internet diffusion in emerging economies.

The digital divide in developing nations need not be permanent if technological adaptations and institutional innovation expand access. Entrepeneurs in Brazil have developed low cost computers (in the $300 range), and Indian datacom start-ups are developing low cost means for wireless Internet access.

Wired magazine published a list in 2000 of the top 46 international hubs for technology innovation and development: of these, the U.S. has 13 hubs, Europe 16, South America 2, Africa 2, Asia 9 (Tapei, Bangalore, Tokyo, Kyoto, Hsinchu/Taiwan, Hong Kong, Inchon/Korea, Kuala Lumpur, Singapore), and Australia 2 (Melbourne, Queensland). Bangalore is rated 11th in this list.

Venture capital, key to much innovation, is now spreading from the US to Europe, Japan, China, India, Israel and Singapore. Countries like India are also investing heavily in ICT training: English-language technical colleges turn out more than 73,000 graduates a year.

The report compiles a new measure called Technology Achievement Index, drawn from technology creation (number of patents), diffusion of recent innovation (Internet), diffusion of old innovation (electricity, telephones), and human skills (years of schooling, technical students).

Accordingly, countries fall into one of four categories: leaders (eg. U.S., Sweden, Japan, Korea, Singapore, Australia), potential leaders (Spain, Italy, Hong Kong, Malaysia), dynamic adopters (Thailand, Philippines, China, Indonesia, Sri Lanka, India), and marginalized (Pakistan, Senegal, Nepal). Potential leaders have diffused old technologies widely but innovate little; dynamic adopters have important hi-tech hubs but the diffusion of old technologies is incomplete.

In the pharmaceutical arena, breakthrough cures have been developed in Cuba (meningitis), Vietnam (malaria) and Thailand (dengue fever). New vaccines, nanotechnology and transgenic crops hold hope for better health and nutrition prospects.

3. Managing the risks of technological challenge

The benefits of technology can be far greater than what their creators could foresee, as evinced by the growth of radio, transistor, and PC. But the hidden costs can also be devastating - mad cow disease, nuclear contamination, and CFCs being a few notable examples.

Thus, it may on occasion be advantageous to be a technological follower rather than a first-mover, and observe the risks played out in other countries. While not every country needs to develop cutting-edge technologies, every country needs domestic capacity to assess and localize potential benefits of such innovations.

But there still needs to be institutional and regulatory capacity to manage risks, in areas like health and environment.

Developing countries typically have four choices of policy stances towards new technological innovation, consumer choices, and trade: promotional, permissive, precautionary, and preventive.

The freedom to innovate and to take risks will continue to play a central role in global development. Consultative activity forms a big component of risk communications. The report advocates active feedback loops in society, harmonization of health standards, and regional collaboration between experts.

4. National policies for unleashing technological creativity

For developing nations, it is important to note that even in the network age, national domestic policy still matters. Telecom competition, vocational training, and R&D are important parameters here.

An environment that encourages innovation requires a number of prerequisites: political and macroeconomic stability, telecom reform, academic-industrial linkages, foresight studies, universal education, pro-venture capital reforms, IT education in schools, good pay for teachers, incentives to attract diaspora entrepreneurs, lifelong education and vocational training institutes, national skill audits, and international quality benchmarking.

Notable successes here include Costa Rica's Investment and Development Board (CINDE), Peru's telecentre network Red Cientifica Peruana, Korea's Technology Development Corporation, Taiwan's HsinChu Science Park, Singapore's Cooperative Research Programme, Brazil's Committee for Democracy in Information Technology, and Thailand's SchoolNet initiative for Internet access in schools.

Other notable hybrid programmes include Sri Lanka's Kothmale Community Radio project (serving as an Internet bridge for listeners), and India's Indira Gandhi National University (with distance education offerings).

The international ICT and genetic industry pools have created global mobility for professionals in these sectors - simultaneously creating 'brain drain' challenges as well as 'brain gain' opportunities via diaspora who can plough precious investments and business networking skills back home.

Korea, Taiwan and India (of late) have successfully engaged their diasporas in technology ventures at home, thanks to improving domestic conditions and work incentives. Many developing countries are contemplating tax policies which can help stem or tap their brain drain.

5. Global initiatives for harnessing technology for development

Technology breakthroughs in one country can be used around the world; many emerging technologies require consensus in governance by countries around the world. Both developments require global and reagional initiatives, especially in areas like intellectual property rights (eg. involving MNCs, public research institutes, and farming communities).

Infamous cases of falsely claimed patents by MNCs and foreign players on indigenous innovation include those of the neem tree, turmeric, and the Mexican enola bean.

Research on and development of technologies for poor people's needs have long been underfunded. Just nine OECD countries account for more than 95% of the world's publicly supported energy research and development. But renewable energy, a potential boon for developing countries, receives little attention. Global initiatives will also be needed to coordinate vaccine production, generate new staple food varieties for regions like sub-Saharan Africa, and devise affordable ICTs.

Notable multi-actor alliances in the developing world include the e-ASEAN initiative for ICT in southeast Asia, ASARECA for agricultural research in Africa, and FONTAGRO for agricultural technology in Latin America. G-8 initiatives in the IT arena include the Digital Opportunities Taskforce (DOT Force).

Transparency and equitable representation across national boundaries is a requisite for emerging global governance bodies like ICANN (for Internet domain names).

CONCLUSION

The ultimate significance of the network age is that it can empower people by enabling them to use and contribute to the world's collective knowledge. And the great challenge of the new century is to ensure that the entire human race is so empowered - not just a lucky few.

In sum, the report argues that the challenge today is tremendous: to match the innovations in science and technology with policy innovations that can turn global technological advance into a tool for development.

(with kind permission of the author)