The role of policy space in technology evolution

Evidence from India and what Ghana can learn

Abstract

It is incontrovertible that development is and has always been a function of public policy. The necessity for states to have enough space, to figure out in organic manner, which policy options work best for them, cannot be overemphasized. Using national policy tools effectively and freely to navigate a development path engenders sustainable and progressive development. It is without doubt that the sharp divide between developed and developing countries is partly, if not completely, attributable to the space developed countries had to navigate their path to development. Developing countries today are confronted with enormous challenges in their bid to use domestic policy tools—especially in trade and industrial development—effectively in the midst of a strong international and domestic environment of mass liberalization. These developments have constrained the policy space of most developing countries in their use of policy tools to direct their developments. This paper argues that for developing countries to amass adequate capabilities in science, technology and innovations (STI), they require adequate policy space through the use of policy tools such as subsidies, tax and non-tax measures to accentuate their progress. As a matter of fact, developing countries can see meaningful progress in capacity accumulation in technology for development, if they have the unrestrained opportunity to choose the best mix of policy options to drive the sectors of their economies that constitute the nucleus of growth. In this regard, ‘business as usual’ outward policies do not work at least in the interim. The paper dwells on the experiences of India in the software and pharmaceutical industries to argue for the need for policy space in technology evolution.