Knowledge and Developing Economies

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Dialogue

Knowledge and Developing Economies

PHILIP CHENG, BRIAN HILTON AND CHONG CHOI

ABSTRACT Philip Cheng, Brian Hilton and Chong Choi argue that the importance of knowledge has created a convergence of research interests for developed, high income and developing, low-income economies that makes the issue of knowledge a critical one in research into the evolving global economy. They explore the potential role knowledge could play in the developing and emerging economies, especially in their capacity to exchange knowledge with the rest of the world through the market through an appropriate system for establishing individual intellectual property rights. KEYWORDS intellectual property rights; globalization; public goods; strategic networks

Introduction Recent analytical research on knowledge is based on experience in developed economies. The majority of the world’s population still resides in developing economies. Here, we set out to re-dress this a little and do so in a manner hopefully enhancing our understanding of knowledge more generally. After several decades of development research, there is an increasing consensus that ‘knowledge’ is the crucial resource for development, being far more significant than the traditional resources of land, labour and capital. In line with much of the recent editorial thread of this journal (Harcourt, 2002, 2003) we believe that knowledge is crucial for economic development. The interaction it creates between organizations and institutions is crucial; knowledge tends to be socially dispersed and only accumulated and exchanged in exclusive processes generated through networking. While knowledge is increasingly crucial to the development of the poorest it is also crucial to success in developed economies. One could even argue that it is because the latter have access to the processes required to support knowledge creation and distribution that they are developed. Some have argued that the power of the latter to dictate the form and substance of the processes creating knowledge allows them to continuously re-create themselves as both wealthy and knowledge rich. This leaves the rest of the world impoverished in knowledge and wealth (Harcourt 2002, 2003).

Development (2005) 48(3), 87–92. doi:10.1057/palgrave.development.1100153

Development 48(3): Dialogue Knowledge and development

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Research on this topic has tended to see knowledge generically. The focus is then on how different market, organizational and institutional structures differ in their capabilities of creating, sustaining and distributing it. Such work has focused on these issues from the perspective of ‘developed’ economies. The issues can be and often are very different in a developing or emerging market context (Choi et al., 2004). In a North American multinational, knowledge creation through R&D and its future market exploitation are the issues. In an emerging economy, knowledge absorption through technology licensing or the cost of the institutions required by international treaties to protect intellectual pr