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Why education and technology matter for poverty eradication

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Why education and technology matter for poverty eradication

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The former director of the World Bank’s Global Indicators Group, Augusto Lopez-Claros, has written and lectured extensively on those factors and policies which are central in the fight against global poverty. Two areas whose importance he has highlighted concern the role of education and technology.

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The former director of the World Bank's Global Indicators Group, Augusto Lopez-Claros, has written and lectured extensively on those factors and policies which are central in the fight against global poverty. Two areas whose importance he has highlighted concern the role of education and technology. In his lectures he has argued that education is critical for development and for nurturing a capacity for innovation and noted the progress made in the past 50 years. By the turn of the century well over half of the world's countries had primary enrolment rates of 100 per cent as opposed to only 28 percent in 1960. Yet illiteracy is still a fact of life in many developing nations, with close to 800 million people in the world still unable to read or write. Lack of such basic skills severely limits the possibilities of citizens to participate in the development process, to be gainfully employed, to be well-informed judges of government policies and politicians, and not to fall captives to the manipulations of demagogues. From a business perspective, without access to workers with a basic education, companies are limited to resource- or basic labor-intensive industries and constrained in their ability to grow and to move up the value chain.

However, enrollment rates in themselves do not tell the whole story, as they disguise important differences in the quality of education. An artificial focus on enrolment rates, has often obscured the importance of the quality of learning, and the role of incentives and motivation of teachers and students. As the global economy has become more complex, to compete and maintain a presence in global markets it is essential to boost the human capital endowments of the labor force, whose members must have access to new knowledge, be constantly trained in new processes and in the operation of the latest technologies. Numerous experts have emphasized the need for high educational standards as well as education and training that has a strong practical orientation. As coverage of primary education has expanded rapidly in the developing world, higher education has gained importance. Thus, countries which have invested heavily in a well-developed infrastructure for tertiary education have reaped enormous benefits in terms of growth. Education has been a particularly important driver in the development of the capacity for technological innovation, as the experience of Finland, Korea, Taiwan, and Israel clearly shows.

An increasingly important factor in explaining successful economic development concerns the agility with which an economy adopts existing technologies to enhance the productivity of its industries. In fact, the relative importance of technology for competitiveness has been increasing in recent years, as progress in the dissemination of knowledge and the increasing use of information and communications technologies have become increasingly widespread. This requires an environment that is conducive to innovative activity, supported by both the public and the private sectors. In particular, this means sufficient business investment in research and development, high-quality scientific research institutions, collaboration in research between universities and industry, and protection of intellectual property.

Augusto Lopez-Claros, PhD, is currently on leave from the World Bank as Senior Fellow at the Edmund A. Walsh School of Foreign Service at Georgetown University. Throughout his career, Dr. Lopez-Claros has written in a variety of professional publications such as the Georgetown Journal of International Affairs, the Occasional Paper Series at the International Monetary Fund, the Washington Quarterly, and the Journal of International Commerce, Economics, and Policy. He has also published numerous Op Ed articles in some of the world's leading newspapers including the Wall Street Journal, Financial Times, International Herald Tribune, plus many others in multiple other countries. View all posts by augustolopezclaros

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Why education and technology matter for poverty eradication

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The former director of the World Bank's Global Indicators Group, Augusto Lopez-Claros, has written and lectured extensively on those factors and policies which are central in the fight against global poverty. Two areas whose importance he has highlighted concern the role of education and technology. In his lectures he has argued that education is critical...

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Supportive Legislation Can Improve Agribusiness and Create Jobs

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Supportive Legislation Can Improve Agribusiness and Create Jobs

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International Ph.D. economist Augusto Lopez-Claros was a World Bank director who previously worked as a chief economist and director of the Global Competitiveness Program at the World Economic Forum in Switzerland, where he interacted with senior policy makers and heads of the world’s largest corporations on multiple aspects of economic development. At the World Bank, Augusto Lopez-Claros was involved in the production of the annual Enabling the Business of Agriculture report, which analyzed how regulations affected the business of agriculture in countries across the world.

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International Ph.D. economist Augusto Lopez-Claros was a World Bank director who previously worked as a chief economist and director of the Global Competitiveness Program at the World Economic Forum in Switzerland, where he interacted with senior policy makers and heads of the world's largest corporations on multiple aspects of economic development. At the World Bank, Augusto Lopez-Claros was involved in the production of the annual Enabling the Business of Agriculture report, which analyzed how regulations affected the business of agriculture in countries across the world.

Agriculture has the potential to create millions of jobs, lifting a lot of people out of poverty while boosting food security. Research shows that 65 percent of the world's poor working adults are involved in agriculture. Therefore, growth in this sector is up to four times better at raising incomes for these people as compared to growth in other sectors. However, this can only be achieved when regulations support agricultural growth rather than inhibit it. The importance of this issue cannot be overstated. While there has been much progress in the past 3 decades in reducing the incidence of extreme poverty, the progress made has been fairly uneven, geographically speaking. High economic growth in China (and, to a lesser extent, India) has contributed to pulling out of extreme poverty hundreds of millions of people. But the number of poor in Sub-Saharan Africa has actually risen over the same period.

Furthermore, the poverty line used by the World Bank to define extreme poverty is extremely austere: $1.90 per day. At a more reasonable $3.20 per day, the number of poor more than doubles and is close to some 2 billion people, which is unacceptably high. Having a dynamic agricultural sector, therefore, that provides employment and enhances food security is a vital economic goal. Furthermore, the scientific evidence suggests that climate change will have a particularly harmful effect on countries' agricultural sectors and low-income countries-heavily dependent on agriculture-will be particularly affected. In addition, population forecasts suggest that we are rapidly headed to a world population of some 9-10 billion people by 2050, 95 percent of it taking place in the developing world and creating huge demand for food production.

Farmers and entrepreneurs in the farm-to-plate value chain face a lot of legal barriers that inhibit growth. These barriers affect various elements of agriculture from access to land, seeds, and fertilizer to the availability of credit and transport. Water use and market access are other issues. Inhibiting regulations around these issues impedes agricultural growth. For example, if the procedure for obtaining food export documents in one country is unnecessarily long, it increases business costs and causes food wastage. If legal bottlenecks make it harder to sell or use new tractors, as is the case in South East Asia, farmers cannot farm efficiently, leading to reduced yields.

Government regulations affect agriculture in many ways. The World Bank calls upon governments to implement public policies that support agribusiness growth to end poverty and ensure global food security.

Augusto Lopez-Claros, PhD, is currently on leave from the World Bank as Senior Fellow at the Edmund A. Walsh School of Foreign Service at Georgetown University. Throughout his career, Dr. Lopez-Claros has written in a variety of professional publications such as the Georgetown Journal of International Affairs, the Occasional Paper Series at the International Monetary Fund, the Washington Quarterly, and the Journal of International Commerce, Economics, and Policy. He has also published numerous Op Ed articles in some of the world's leading newspapers including the Wall Street Journal, Financial Times, International Herald Tribune, plus many others in multiple other countries. View all posts by augustolopezclaros

Published

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Supportive Legislation Can Improve Agribusiness and Create Jobs

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International Ph.D. economist Augusto Lopez-Claros was a World Bank director who previously worked as a chief economist and director of the Global Competitiveness Program at the World Economic Forum in Switzerland, where he interacted with senior policy makers and heads of the world's largest corporations on multiple aspects of economic development.

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Leaving No One Behind – Establishing a Global ICT Platform

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Leaving No One Behind – Establishing a Global ICT Platform

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Before his appointment as senior fellow at the Edmund Walsh School of Foreign Service, Dr. Augusto Lopez-Claros was a director at the World Bank. With years of experience as a development economist Dr. Lopez-Claros has written and lectured extensively about policies that encourage growth. In a talk he delivered in 2009 at Microsoft’s Government Leaders Forum he addressed the importance of adopting an information and communication technologies (ICT) platform to remain competitive. He said that an increasingly important factor in explaining successful economic development concerned the agility with which an economy adopted existing technologies to enhance the productivity of its industries.

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Before his appointment as senior fellow at the Edmund Walsh School of Foreign Service, Dr. Augusto Lopez-Claros was a director at the World Bank. With years of experience as a development economist Dr. Lopez-Claros has written and lectured extensively about policies that encourage growth. In a talk he delivered in 2009 at Microsoft's Government Leaders Forum he addressed the importance of adopting an information and communication technologies (ICT) platform to remain competitive. He said that an increasingly important factor in explaining successful economic development concerned the agility with which an economy adopted existing technologies to enhance the productivity of its industries.

This is critical because technological differences have been shown to explain much of the variation in productivity between countries. In fact, the relative importance of technology for competitiveness has been increasing in recent years, as progress in the dissemination of knowledge and the increasing use of ICTs have become increasingly widespread. Technology-intensive foreign direct investment not only provides strong productivity gains and improvements in business processes, but also has a number of important spillover effects, including improvements in management practice and positive effects on human capital where new technologies provide the incentive for employees to acquire new skills. At the same time, other companies become increasingly aware of the advantages of upgrading technology, with positive repercussions for the productivity of the sector as a whole.

Innovation, of course, is particularly important for countries that have reached the high-tech frontier. While less advanced countries can still improve their productivity by adopting existing technologies or making incremental improvements in other areas, for countries that have reached the innovation stage of development, this is no longer sufficient to increase productivity. Firms in these countries must design and develop cutting-edge products and processes to maintain a competitive advantage. This requires an environment that is conducive to innovative activity, supported by both the public and the private sectors.

In particular, this means sufficient business investment in research and development, high-quality scientific research institutions, collaboration in research between universities and industry, and protection of intellectual property. As of 2018, four of the seven countries that are home to the top 100 digital companied were in Asia. The other three were in North America and Europe. In terms of figures, the global digital economy is worth $11.5 trillion, equivalent to about 15 percent of global GDP. This point is made relevant when considering countries in Africa. While Africans use technology, they face significant challenges accessing data, mobile services, and dealing with excessive data costs, among other broadband issues. These challenges directly impact social and digital sectors, e-commerce, e-health, and e-government capabilities, which prevent African countries from competing on an even footing globally.

Given the importance of innovation for long-term growth, innovation policy is currently very much at the center of economic policy in many countries. A key insight from these discussions is that innovation policies should aim to foster an environment which promotes entrepreneurship and innovation across the economic spectrum.

Augusto Lopez-Claros, PhD, is currently on leave from the World Bank as Senior Fellow at the Edmund A. Walsh School of Foreign Service at Georgetown University. Throughout his career, Dr. Lopez-Claros has written in a variety of professional publications such as the Georgetown Journal of International Affairs, the Occasional Paper Series at the International Monetary Fund, the Washington Quarterly, and the Journal of International Commerce, Economics, and Policy. He has also published numerous Op Ed articles in some of the world's leading newspapers including the Wall Street Journal, Financial Times, International Herald Tribune, plus many others in multiple other countries. View all posts by augustolopezclaros

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Leaving No One Behind - Establishing a Global ICT Platform

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Before his appointment as senior fellow at the Edmund Walsh School of Foreign Service, Dr. Augusto Lopez-Claros was a director at the World Bank. With years of experience as a development economist Dr. Lopez-Claros has written and lectured extensively about policies that encourage growth. In a talk he delivered in 2009 at Microsoft's Government Leaders...

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Welcome to the website of international economist Augusto Lopez-Claros - Augusto Lopez-Claros

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Welcome to the website of international economist Augusto Lopez-Claros - Augusto Lopez-Claros

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For the 2018 academic year Augusto Lopez-Claros is on leave from the World Bank as a Senior Fellow at the Edmund Walsh School of Foreign Service at Georgetown University. Between 2011 and 2017 he was the Director of the World Bank's Global Indicators Group, the department responsible for the Bank's Doing Business report and other international benchmarking studies. Previously he was Chief Economist and Director of the Global Competitiveness Program at the World Economic Forum in Geneva, where he was also the Editor of the Global Competitiveness Report, the Forum's flagship publication, as well as a number of regional economic reports. Before joining the Forum he worked for several years in the financial sector in London, with a special focus on emerging markets. He was the International Monetary Fund's Resident Representative in the Russian Federation during the 1990s.

Before joining the IMF, Lopez-Claros was a Professor of Economics at the University of Chile in Santiago. He was educated in England and the United States, receiving a diploma in Mathematical Statistics from Cambridge University and a PhD in Economics from Duke University. He is a much-sought-after international speaker, having lectured in the last several years at some of the world's leading universities and think tanks. In 2007 he was a coeditor of The International Monetary System, the IMF, and the G-20: A Great Transformation in the Making? and The Humanitarian Response Index: Measuring Commitment to Best Practice, both published by Palgrave. He was the editor of The Innovation for Development Report 2009-2010: Strengthening Innovation for the Prosperity of Nations, published by Palgrave in November 2009. More recent publications include: "Removing Impediments to Sustainable Economic Development: The Case of Corruption" (2015), "Fiscal Challenges After the Global Financial Crisis: A Survey of Key Issues" (2014) and "The Moral Dimension of the Fight Against Corruption" (2017). In May of 2018 Sweden's Global Challenges Foundation awarded Lopez-Claros the New Shape Prize for his work (with Arthur Dahl and Maja Groff) "Global Governance and the Emergence of Global Institutions for the 21st Century." St. Martin's Press has just published his book (co-authored with Bahiyyih Nakhjavani) Equality for Women = Prosperity for All.

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Welcome to the website of international economist Augusto Lopez-Claros - Augusto Lopez-Claros

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For the 2018 academic year Augusto Lopez-Claros is on leave from the World Bank as a Senior Fellow at the Edmund Walsh School of Foreign Service at Georgetown University. Between 2011 and 2017 he was the Director of the World Bank's Global Indicators Group, the department responsible for the Bank's Doing Business report and other international benchmarking studies.