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Technology upgrades by companies are almost continuous

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Since the breakthrough work of Joseph Schumpeter, technology has been recognized as central to economic growth and development. The technology companies use is central to the process of creative destruction. But despite this centrality, we can measure where the frontier is, how far companies in developing countries are from it, and what technology companies use in their day-to-day operations. Comprehensive data across sectors are not available.

of “Bridging the Technology Gap” Volume 7 of World Bank Productivity ProjectLet’s analyze the first round of enterprise-level Technology Adoption (FAT) survey data. This is a new research tool aimed at measuring the technology companies use. New methods and data collected through our research tools enable practitioners and policy makers to look inside the “black box” of technology adoption by businesses and identify key constraints to digital transformation. I can do it. Specifically, in this book he analyzes data for his over 13,000 companies in 11 countries*. It measures over 300 technologies applied to general and sector-specific business functions across geographies and income levels. FAT data opens new avenues of research on technology, including the relationship between task outsourcing and technology adoption. The study empirically verifies some known facts, including the positive relationship between technology and productivity at the firm and country level. Importantly, our data also dispels some myths about technology adoption and use.

One such myth relates to the high frequency of leapfrogging of new technologies. But in reality, technological advancement is a continuous and cumulative process. It is a process that requires companies to gradually acquire the ability to adopt more advanced technologies.

Better measuring technology adoption can help policymakers design more effective policies and dispel myths such as the frequency of leapfrogging.

The ubiquity of mobile phones is a prominent example often cited to illustrate the process of leapfrogging. The first mobile phone calls were made in his early 1970s, but in the 2000s, the technology began to spread rapidly in middle and lower middle-income countries, hindering landline penetration. I was. Low-income countries were quick to jump on this new technology. His analysis of FAT data, using large corporations as a proxy for early adopters of technology, shows that the patterns observed in corporate mobile and landline usage are consistent with leapfrog (Fig. 1). Small businesses (late adopters) are almost as likely to adopt mobile phones in their business operations as large enterprises (early adopters).

Figure 1. evidence of leapfrog is Observed when compared to dSpread of landline phones vs mobile phone

sauce: “Bridging the Technology Gap” 2022.

However, this pattern don’t keep for other technologies.In fact, leapfrogging is not common Observed Across many new technology used by companies. For example, if we look at technologies such as:: a) dBlueprintfor clothes Also b) metersfor retail (Figure 2)find a different pattern than the above. figure indicates of Possibility to adopt more advanced technology (orange, redand yellow lineRespectively) increases with firm size (Recruitment agent) Follow the sophisticated order of technology Availablethat’s why Identified by sector Expert About the design of the FAT survey advance. More sophisticated technology is less adopted by small businesses.

Figure 2. technology youUpgrading Mes meterslargely cContinuous pprocess

Figure 2

Figure 2

sauce: “Bridging the Technology Gap” 2022.

Overall, the gets results From FAT survey support Hypothesis that technology upgrades are almost a continuous process. This pattern is common new technology of business function in another sectors farming, manufacturing, or servicing. The pattern hold Technology used Business management, planning, sales, quality control, etc. are common tasks for any company. An important policy implication is that Governments need to keep prioritizing Actions to build capacity make it easier technology upgrades, In terms of a continuous and step-by-step process. Opportunity for leaps and bounds May still exist, However they tendency happens below very specific conditions unlikely to generalize in most technology Or close the technical gap significantly.

*Note: Bangladesh; Brazil (State of Ceara only); Burkina Faso; Ghana; India (States of Tamil Nadu and Uttar Pradesh only);