Human Development Report - Overview
entire report is available at
Report, like all previous Human Development
Reports, is about
people. It is about
people can create and use technology to improve their lives. It is also about
policies to lead the revolutions in information and communications technology
in the direction of human development.
all over the world have high hopes that these new technologies will lead to
greater social freedoms, increased knowledge and more productive livelihoods.
is a great rush to be part of the network age—the combined result of the
and globalization that are integrating markets and linking people across all
the same time, there is great fear of the unknown. Technological change, like
risks, as shown by the industrial disaster in Bhopal (India), the nuclear
disaster in Chernobyl
the birth defects from thalidomide and the depletion of the ozone layer by
And the more novel and fundamental is the change, the less is known
its potential consequences and hidden costs. Hence there is a general mistrust
corporations and governments— indeed, of the whole technology establishment.
Report looks specifically at how new technologies will affect developing
poor people. Many people fear that these technologies may be of little use to
that they might actually widen the already savage inequalities between North
South, rich and poor. Without innovative public policy, these technologies could
source of exclusion, not a tool of progress. The needs of poor people could
global risks left unmanaged. But managed well, the rewards could be greater than
the United Nations Millennium Summit, world leaders agreed on a set of
monitorable goals for development and poverty eradication to achieve by 2015.
world has made over the past 30 years shows that these goals are attainable. But
will not achieve them without much faster progress. While 66 countries are
track to reduce under-five mortality rates by two-thirds, 93 countries with 62%
of the world’s
are lagging, far behind or slipping. Similarly, while 50 countries are on track
safe water goal, 83 countries with 70% of the world’s people are not. More
than 40% of the
people are living in countries on track to halve income poverty by 2015. Yet
just 11 countries that include China and India (with 38% of the world’s
people), and 70 countries
far behind or slipping. Without China and India, only 9 countries with 5% of the
people are on track to halve income poverty. New technology policies can spur
towards reaching these and other goals.
The technology divide does not have to follow the income divide. Throughout
has been a powerful tool for human development and poverty reduction.
is often thought that people gain access to technological innovations—more
transportation, the telephone or the Internet—once they have more income. This
growth creates opportunities for useful innovations to be created and diffused.
the process can also be reversed: investments in technology, like investments in
can equip people with better tools and make them more productive and prosperous.
is a tool, not just a reward, for growth and development.
fact, the 20th century’s unprecedented gains in advancing human development
poverty came largely from technological breakthroughs:
In the late 1930s mortality rates began to decline rapidly in Asia, Africa and
by the 1970s life expectancy at birth had increased to more than 60 years. In
same gain took more than a century and a half starting in the early 1800s. The
of the 20th century were propelled by medical technology—antibiotics and
progress in the 19th century depended on slower social and economic changes,
better sanitation and diets.
The reduction in undernutrition in South Asia from around 40% in the 1970s to
the end of chronic famine—was made possible by technological breakthroughs
plant breeding, fertilizers and pesticides in the 1960s that doubled world
cereal yields in just
years. That is an astonishingly short period relative to the 1,000 years it took
yields to quadruple from 0.5 to 2.0 tonnes per hectare.
examples show how technology can cause discontinuous change: a single innovation
quickly and significantly change the course of an entire society. (Consider what
vaccine or cure for AIDS could do for Sub-Saharan Africa.)
technology-supported advances in health, nutrition, crop yields and employment
usually not just one-time gains. They typically have a multiplier
cycle, increasing people’s knowledge, health and productivity, and raising
building capacity for future innovation— all feeding back into human
technological transformations are more rapid (the power of a computer chip
18–24 months without cost increase) and more fundamental (genetic engineering
and are driving down costs (the cost of one megabit of storage fell from $5,257
1970 to $0.17 in 1999). These transformations multiply the possibilities of what
with technology in areas that include:
Participation. The Internet, the wireless telephone and other information
enable people to communicate and obtain information in ways never
possible, dramatically opening up possibilities to participate in decisions that
lives. From the fax machine’s role in the fall of communism in 1989 to the
helped topple Philippine President Joseph Estrada in January 2001, information
communications technology provides powerful new ways for citizens to demand
their governments and in the use of public resources.
Knowledge. Information and communications technology can provide rapid,
to information about almost all areas of
to long-distance medical diagnosis in the
in India, the Internet is breaking barriers of geography, making markets more
opportunities for income generation and enabling increased local participation.
New medicines. In 1989 biotechnological research into hepatitis B
resulted in a breakthrough
Today more than 300 biopharmaceutical products are on the market or seeking
and many hold equal promise.
more can be done to develop vaccines and treatments for HIV/AIDS and other
endemic in some developing countries.
New crop varieties. Trangenics offer the hope of crops with higher
yields, pest- and
properties and superior nutritional characteristics—especially for farmers
ecological zones left behind by the green revolution In China genetically
modified rice offers
higher yields without the need for increases in other farm inputs, and modified
cotton) allows pesticide spraying to be reduced from 30 to 3 times.
New employment and export opportunities.
recent downturn in the Nasdaq has quieted
some developing countries remains tremendous as electronic commerce breaks
distance and market information. Revenues from India’s information technology
from $150 million in 1990 to $4 billion in 1999.
this is just the beginning. Much more can be expected as more technologies are
the needs of developing countries.
The market is a powerful engine of technological progress—but it is not
to create and diffuse the technologies needed to eradicate poverty.
is created in response to market pressures—not the needs of poor people, who
little purchasing power. Research and development, personnel and finance are
rich countries, led by global corporations and following the global market
by high-income consumers.
1998 the 29 OECD countries spent $520 billion on research and development—more
the combined economic output of the world’s 30 poorest countries. OECD
19% of the world’s people, also accounted for 91% of the 347,000 new patents
And in these countries more than 60% of research and development is now carried
by the private sector, with a correspondingly smaller role for public sector
a result research neglects opportunities to develop technology for poor people.
1998 global spending on health research was $70 billion, but just $300 million
to vaccines for HIV/AIDS and about $100 million to malaria research. Of 1,223
marketed worldwide between 1975 and 1996, only 13 were developed to treat
only 4 were the direct result of pharmaceutical industry research. The picture
much the same for research on agriculture and
is also unevenly diffused. OECD countries contain 79% of the world’s
Africa has less international bandwidth than São Paulo, Brazil. Latin
in turn, is roughly equal to that of Seoul, Republic of Korea.
disparities should come as no surprise. After all, electric power generation and
were first developed in 1831 but are still not available to a third of the
2 billion people still do not have access to low-cost essential medicines (such
of which were developed decades ago. Half of Africa’s one-year-olds have not
immunized against diphtheria, pertussis, tetanus, polio and measles. And oral
a simple and life-saving treatment, is not used in nearly 40% of diarrhoea cases
financing compounds the problem. High-tech startups in the United States
thrived on venture capital. But in many developing countries, where even basic
are underdeveloped, there is little prospect of such financing. Moreover, the
intellectual property protection in some countries can discourage private
global map of technological achievement in this Report shows huge inequalities
just in terms of innovation and access, but also in the education and skills
to use technology effectively. The Report’s technology achievement index (TAI)
country-by-country measure of how countries are doing in these areas.
is also unevenly diffused within countries. India, home to a world-class
in Bangalore, ranks at the lower end of the TAI. Why? Because Bangalore is a
enclave in a country where the average adult received only 5.1 years of
is 44%, electricity consumption is half that in China and there are just 28
every 1,000 people.
Developing countries may gain especially high rewards from new technologies, but
also face especially severe challenges in managing the risks.
current debate in Europe and the United States over genetically modified crops
the concerns and needs of the developing world. Western consumers who do not
food shortages or nutritional deficiencies or work in fields are more likely to
safety and the potential loss of biodiversity, while farming communities in
are more likely to focus on potentially higher yields and greater nutritional
and on the reduced need to spray pesticides that can damage soil and sicken
the recent effort to globally ban the manufacture of DDT did not reflect the
in preventing malaria in tropical countries.
while some risks can be assessed and managed globally, others must take into
local considerations. The potential
from thalidomide are no different for people in Malaysia than in Morocco.
gene flow from genetically modified corn would be more likely in an environment
corn-related wild species than in one without such indigenous plants.
risks in particular are often specific to individual ecosystems and need to be
case by case. In considering the possible environmental consequences of
crops, the example of European rabbits in Australia offers a warning. Six
introduced there in the 1850s. Now there are 100 million, destroying native
flora and fauna
costing local industries $370 million a year.
new technologies offer particular benefits for the developing world, they also
Technology-related problems are often the result of poor policies, inadequate
lack of transparency. (For instance, poor management by regulators led to the
HIV-infected blood in transfusions during the 1980s and to the spread of mad cow
recently.) From that perspective, most developing countries are at a
lack the policies and institutions needed to manage the risks well.
researchers and trained technicians are essential for adapting new technologies
local use. A shortage of skilled personnel—from laboratory researchers to
officers—can seriously constrain a country’s ability to create a strong
Even in developing countries with more advanced capacity, such as Argentina and
systems have nearly exhausted national expertise.
cost of establishing and maintaining a regulatory framework can also place a
on poor countries. In the United States three major, well-funded agencies—the
of Agriculture, Food and Drug Administration and Environmental Protection
all involved in regulating genetically modified organisms. But even these
appealing for budget increases to deal with the new challenges raised by
stark contrast, regulatory agencies in developing countries survive on very
policies and mechanisms are needed at the regional and global levels, and
include active participation from developing countries.
The technology revolution and globalization are creating a network age—and
how technology is created and diffused.
simultaneous shifts in technology and economics—the technological revolution
combining to create a new network age. Just as the steam engine and electricity
physical power to make possible the industrial revolution, digital and genetic
are enhancing brain power.
industrial age was structured around vertically integrated organizations with
of communications, information and transportation. But the network age is
horizontal networks, with each organization
cross continents, with hubs from Silicon
(South Africa) to Bangalore.
developing countries are already tapping into these networks, with significant
human development. For instance, new malaria drugs created in Thailand and Viet
were based on international research as well as local knowledge.
research is increasingly collaborative between institutions and countries. In
scientists in the United States co-wrote articles with scientists from 173 other
in Brazil with 114, in Kenya with 81, in Algeria with 59. Global corporations,
based in North America, Europe or Japan, now typically have research facilities
countries and outsource production worldwide.
1999, 52% of Malaysia’s exports were hightech, 44% of Costa Rica’s, 28% of
of the Philippines’s. Hubs in India and elsewhere now use the Internet to
support, data processing and customer services for clients all over the world.
labour markets and skyrocketing demand for information and communications
personnel make top scientists and other professionals globally mobile. Thus
investments in education subsidize industrial country economies. Many highly
people migrate abroad even though their home country may have invested heavily
an educated labour force. (For instance, 100,000 Indian professionals a year are
take visas recently issued by the United States—an estimated resource loss for
billion.) But this migration can be a brain gain as well as a brain drain: it
often generates a
that can provide valuable networks of finance, business contacts and skill
Even in the network age, domestic policy still matters. All countries, even the
to implement policies that encourage innovation, access and the development of
all countries need to be on the cutting edge of global technological advance.
But in the network
every country needs the capacity to understand and adapt global technologies for
Farmers and firms need to master new technologies developed elsewhere to stay
global markets. Doctors seeking the best care for their patients need to
and procedures from global advances in medicine. In this environment the key to
success will be unleashing the creativity
creativity requires flexible, competitive, dynamic economic environments. For
developing countries that means building on reforms that emphasize openness—to
ideas, new products and new investment, especially in telecommunications.
such as telecommunications laws that favour government monopolies, still isolate
countries from global networks. In others a lack of proper regulation has led to
the same isolating effects. In Sri Lanka competition among providers of
communications technology has led to increased investment, increased
better service. Chile offers a successful model for pursuing privatization and
open markets and competition are not enough. At the heart of nurturing
human skills. Technological change dramatically raises the premium every country
place on investing in the education and training of its people. And in the
on primary education will not suffice—the advanced skills developed in
tertiary schools are increasingly important.
and on-the-job training also cannot be neglected. When technology is changing,
have to invest in training workers to stay competitive. Smaller enterprises in
benefit from public policies that encourage coordination and economies of scale
that partly subsidize their efforts. Studies in Colombia, Indonesia, Malaysia
shown that such training provides a considerable boost to firm productivity.
failures are pervasive where knowledge and skills are concerned. That is why in
technologically advanced country today, governments have provided funding to
market demand with incentives, regulations and public programmes. But such
has not been mobilized to do the same for most developing countries, from
generally, governments need to establish broad technology strategies in
other key stakeholders. Governments should not try to “pick winners” by
favouring certain sectors
firms. But they can identify areas where coordination makes a difference because
investor will act alone (in building in- frastructure, for example). Costa Rica
successful in implementing such a strategy.
National policies will not be sufficient to compensate for global market
initiatives and the fair use of global rules are needed to channel new
the most urgent needs of the world’s poor people.
national government can single-handedly cope with global market failures. Yet
there is no
framework for supporting research and development that addresses the common
poor people in many countries and regions.
is the research needed for? The list is long and fast changing. Some top
Vaccines for malaria, HIV and tuberculosis as well as lesser-known diseases like
and river blindness.
New varieties of sorghum, cassava, maize and other staple foods of Sub-Saharan
Low-cost computers and wireless connectivity as well as prepaid chip-card
without credit cards.
Low-cost fuel cells and photovoltaics for decentralized electricity supply.
can be done? Rich countries could support a global effort to create incentives
partnerships for research and development, boosted by new and expanded sources
Civil society groups and activists, the press and policy-makers could nurture
on difficult issues such as the differential pricing of pharmaceuticals and the
implementation of intellectual property rights. The lesson of this Report is
that at the
level it is policy, not charity, that will ultimately determine whether new
tool for human development everywhere.
incentives and new partnerships.
a time when universities, private companies and public institutions are
reshaping their research
new international partnerships for development can bring together the
of each while balancing any conflicts of interest. Many approaches to creating
possible—from purchase funds and prizes to tax credits and public grants.
promising model is the International AIDS Vaccine Initiative, which brings
industry, foundations and public researchers through innovative intellectual
agreements that enable each partner to pursue its interests while jointly
pursuing a vaccine
the HIV/AIDS strain common in Africa
funds for research and development.
the moment it is not even possible to track how much each government or
contributes to research and development to deal with global market failures.
instance, it is relatively easy to find out how
country—but much harder to determine how much of that goes for medical
step towards increased funding in this area would be establishing a mechanism
foundations, such as Rockefeller, Ford and now Gates and Wellcome, have made
contributions to research and development targeted at the needs of developing
But these contributions are far from sufficient to meet global needs, and at
in additional funds could be mobilized from:
Bilateral donors. A 10% increase in official development assistance, if
dedicated to research
development, would put $5.5 billion on the table.
Developing country governments. Diverting 10% of Sub-Saharan Africa’s
1999 would have raised $700 million.
International organizations. In 2000 about $350 million of the World
Bank’s income was
to its interest-free arm for lending to the poorest countries. A much smaller
to technology development for low income countries would go a long way.
Debt-for-technology swaps. In 1999 official debt service payments by
$78 billion. Swapping just 1.3% of this debt service for technology research and
have raised more than $1 billion.
Private foundations in developing countries.
countries could introduce tax incentives to encourage their billionaires to set
foundations. Rich individuals from Brazil to Saudi Arabia to India to Malaysia
regionally relevant research.
Industry. With their financial, intellectual and research resources,
make bigger contributions than they donow. The head of research at Novartis has
these companies devote a percentage of their profits to research on
pharmaceuticals to computer software, key technology products
in demand worldwide. An effective global market would encourage different prices
them in different countries, but the current system does not.
producer seeking to maximize global profits on a new technology would ideally
market into different income groups and sell at prices that maximize profits in
where the main cost to the seller is usually research rather than production,
pricing could lead to an identical product being sold in Cameroon for just
one-hundredth—the price in Canada. But in the network age segmenting the
is not easy. With increasingly open borders and growing Internet sales,
in rich countries fear that re-imports of heavily discounted products will
domestic prices charged to cover overhead
products do not creep back into the home market, knowledge about lower prices
potential for consumer backlash.
mechanisms to deal with these threats, producers are more likely to set global
drugs, for instance) that are unaffordable for the citizens of poor countries.
of the battle to establish differential pricing must be won through consumer
society groups and activists, the press and policy-makers could help the
rich countries understand that it is only fair for people in developing
countries to pay less
medicines and other critical technology products. Without higher prices in rich
would have far less incentive to invest in new research and development.
broader challenge for public, private and non-profit decision-makers is to agree
to segment the global market so that key technology products can be sold at low
countries without destroying markets —and industry incentives—in industrial
This goal should be high on the agenda in upcoming international trade
use of intellectual property rights
fair implementation of TRIPS. Intellectual
property rights are being tightened and increasingly
worldwide. The World Intellectual Property Organization’s Patent Cooperation
accepts a single international application valid in many countries; the number
international applications rose from 7,000 in 1985 to 74,000 in 1999. In the
midst of this
there are two new hurdles for developing countries and poor people.
intellectual property rights can go too far. Some patent applications disclose
great obscurity, stretching patent
to understand. In 2000 the World Intellectual Property Organization received 30
applications over 1,000 pages long, with several reaching 140,000 pages. From
whose function may not be known to patents on such ecommerce methods as oneclick
many believe that the criteria of non-obviousness and industrial utility are
interpreted too loosely.
particular, patent systems lay open indigenous and community-based innovation to
sector claims. Ill-awarded patents, granted despite prior art, obviousness or
as a US patent on the Mexican enola bean—are contributing to the silent
of centuries of developing country knowledge and assets.
current practices are preventing the fair implementation of the World Trade
agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
signatories to the 1994 TRIPS agreement, developing countries are implementing
of intellectual property rights following an agreed set of minimum standards,
such as 20
of patent protection. A single set of minimum rules may seem to create a level
since one set of rules applies to all. But as currently practiced, the game is
not fair be-
the players are of such unequal strength, economically and institutionally.
low-income countries, implementing and enforcing intellectual property rights
on scarce resources and administrative skills. Without good advice on creating
that makes the most of what TRIPS allows, and under intense external pressure to
legislation beyond that required by TRIPS, countries can legislate themselves
disadvantageous position. Moreover, the high costs of disputes with the
world’s leading nations
daunting, discouraging developing countries from asserting their rights.
the game is to be played fairly, at least two changes are needed. First, the
be implemented in a way that enables developing countries to use safeguard
secure access to technologies of overriding
instance, under a range of special conditions TRIPS allows governments to issue
for companies to manufacture products that have been patented by others.
licenses are already in use from Canada and Japan to the United Kingdom and the
for products including pharmaceuticals, computers and tow trucks. They are used
antitrust measures to prevent reduced competition and higher prices. But so far
provisions have not been used south of the equator. Developing countries, like
be able to do in practice what TRIPS allows them to do in theory.
commitments under TRIPS and many other multilateral agreements to promote
transfer to developing countries are paper promises, often neglected in
must be brought to life.
heart of the problem is that although technology may be a tool for development,
a means of competitive advantage in the global economy. Access to patented
and pharmaceuticals, for example, may be essential for combating global
and for saving lives worldwide. But for countries that own and sell them, they
market opportunity. Only when the two interests are reconciled—through, say,
financing—will fair implementation of the TRIPS agreement become a real
charity—to build technological capacity in developing countries
arrangements can only be as effective as national commitments to back them. The
is for governments to recognize that technology policy affects a host of
public health, education and job creation.
are many successful examples of international corporate philanthropy involving
For instance, in-kind donations by
and the agreement to give poor farmers access to vitamin A–enhanced rice could
malnutrition. These initiatives have tremendous appeal—they can be a win-win
in which a country gets access to vital new technologies and a company get good
relations and sometimes tax incentives.
these kinds of industry initiatives are no substitute for structural policy
governments. High-profile projects may gain such support from industry, but less
cannot depend on it. When HIV/AIDS drugs and golden rice are no longer
the news every day, will Chagas disease and
global public support?
countries should not forever be held hostage to the research agendas set by
demand. If any form of development is empowering in the 21st century, it is
unleashes human creativity and creates technological capacity. Many developing
taking up the challenge to make this happen.
initiatives that recognize this will not only provide solutions to immediate
build means to cope with future ones.
ultimate significance of the network age is that it can empower people by
use and contribute to the world’s collective knowledge. And the great
challenge of the new
is to ensure that the entire human race
48 HUMAN DEVELOPMENT REPORT 2001