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TECHNOLOGY

ANDINNOVATION

REPORT

2021

Catchingtechnologicalwaves

Innovationwithequity

Geneva,2021

?2021,UnitedNations

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NOTE

WithintheUNCTADDivisiononTechnologyandLogistics,theSTIPolicySectioncarriesoutpolicy-orientedanalyticalworkontheimpactofinnovationandnewandemergingtechnologiesonsustainabledevelopment,withaparticularfocusontheopportunitiesandchallengesfordevelopingcountries.ItisresponsiblefortheTechnologyandInnovationReport,whichseekstoaddressissuesinscience,technologyandinnovationthataretopicalandimportantfordevelopingcountries,andtodosoinacomprehensivewaywithanemphasisonpolicy-relevantanalysisandconclusions.TheSTIPolicySectionsupportstheintegrationofSTIinnationaldevelopmentstrategiesandinbuildingupSTIpolicy-makingcapacityindevelopingcountries;amajorinstrumentinthisareaistheprogrammeofScience,TechnologyandInnovationPolicyReviews.ThesectionalsoservesasthecoresecretariatoftheUnitedNationsCommissiononScienceandTechnologyforDevelopment(CSTD).

Inthisreport,thetermscountry/economyrefer,asappropriate,toterritoriesorareas.Thedesignationsofcountrygroupsareintendedsolelyforstatisticaloranalyticalconvenienceanddonotnecessarilyexpressajudgementaboutthestageofdevelopmentreachedbyaparticularcountryorareainthedevelopmentprocess.Unlessotherwiseindicated,themajorcountrygroupingsusedinthisreportfollowtheclassificationoftheUnitedNationsStatisticalOffice.Theseare:

Developedcountries:themembercountriesoftheOrganisationforEconomicCo-operationandDevelopment(OECD)(otherthanChile,Mexico,theRepublicofKoreaandTurkey),plustheEuropeanUnionmembercountriesthatarenotOECDmembers(Bulgaria,Croatia,Cyprus,Lithuania,MaltaandRomania),plusAndorra,Liechtenstein,MonacoandSanMarino.CountrieswitheconomiesintransitionreferstothoseofSouth-EastEuropeandtheCommonwealthofIndependentStates.Developingeconomies,ingeneral,arealltheeconomiesthatarenotspecifiedabove.Forstatisticalpurposes,thedataforChinadonotincludethosefortheHongKongSpecialAdministrativeRegionofChina(HongKong,China),MacaoSpecialAdministrativeRegionofChina(Macao,China)orTaiwanProvinceofChina.AnExcelfilewiththemaincountrygroupingsusedcanbedownloadedfrom

UNCTADstatat:/EN/Classifications.html.

Referencestosub-SaharanAfricaincludeSouthAfricaunlessotherwiseindicated.

ReferencesinthetexttotheUnitedStatesaretotheUnitedStatesofAmericaandthosetotheUnitedKingdomaretotheUnitedKingdomofGreatBritainandNorthernIreland.

Theterm“dollar”($)referstoUnitedStatesdollar,unlessotherwisestated.

Theterm“billion”signifies1,000million.

Annualratesofgrowthandchangerefertocompoundrates.

Useofadash(–)betweendatesrepresentingyears,suchas1988–1990,signifiesthefullperiodinvolved,includingtheinitialandfinalyears.

Anobliquestroke(/)betweentwoyears,suchas2000/01,signifiesafiscalorcropyear.

Adot(.)inatableindicatesthattheitemisnotapplicable.

Twodots(..)inatableindicatethatthedataarenotavailable,orarenotseparatelyreported.Adash(–)orazero(0)inatableindicatesthattheamountisnilornegligible.

Decimalsandpercentagesdonotnecessarilyadduptototalsbecauseofrounding.

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FOREWORD

Recentdevelopmentsinfrontiertechnologies,includingartificialintelligence,roboticsandbiotechnology,haveshowntremendouspotentialforsustainabledevelopment.Yet,theyalsoriskincreasinginequalitiesbyexacerbatingandcreatingnewdigitaldividesbetweenthetechnologyhavesandhave-nots.TheCOVID-19pandemichasfurtherexposedthisdichotomy.Technologyhasbeenacriticaltoolforaddressingthespreadofthedisease,butnoteveryonehasequalaccesstothebenefits.

Itistimetoaskhowwecantakefullprofitfromthecurrenttechnologicalrevolutiontoreducegapsthatholdbacktrulyinclusiveandsustainabledevelopment.TheUNCTADTechnologyandInnovationReport2021examinesthelikelihoodoffrontiertechnologieswideningexistinginequalitiesandcreatingnewones.Italsoaddressesthenationalandinternationalpolicies,instrumentsandinstitutionalreformsthatareneededtocreateamoreequalworldofopportunityforall,leavingnoonebehind.

Thereportshowsthatfrontiertechnologiesalreadyrepresenta$350billionmarket,whichcouldgrowto$3.2trillionby2025.Thisoffersgreatopportunitiesforthosereadytocatchthistechnologicalwave.Butmanycountries,especiallytheleastdevelopedandthoseinsub-SaharanAfrica,areunpreparedtoequitablyuse,adoptandadapttotheongoingtechnologicalrevolution.ThiscouldhaveseriousimplicationsforachievingtheSustainableDevelopmentGoals.

TheTechnologyandInnovationReport2021urgesalldevelopingnationstoprepareforaperiodofdeepandrapidtechnologicalchangethatwillprofoundlyaffectmarketsandsocieties.Allcountrieswillneedtopursuescience,technologyandinnovationpoliciesappropriatetotheirdevelopmentstageandeconomic,socialandenvironmentalconditions.ThisrequiresstrengtheningandaligningScience,TechnologyandInnovationsystemsandindustrialpolicies,buildingdigitalskillsamongstudentsandtheworkforce,andclosingdigitaldivides.Governmentsshouldalsoenhancesocialprotectionandeaseworkforcetransitionstodealwiththepotentialnegativeconsequencesoffrontiertechnologiesonthejobmarket.

Thereportalsocallsforstrengthenedinternationalcooperationtobuildinnovationcapacitiesindevelopingcountries,facilitatetechnologytransfer,increasewomen’sparticipationindigitalsectors,conducttechnologicalassessmentsandpromoteaninclusivedebateontheimpactoffrontiertechnologiesonsustainabledevelopment.

Akeytakeawayfromthereportisthattechnologiesarenotdeterministic.Wecanharnesstheirpotentialforthecommongood,andwehaveanobligationtodoso.ThatiswhyIlaunchedaStrategyonNewTechnologiesinSeptember2018toguidetheUnitedNationssystemonhownewtechnologiescanandmustbeusedtoacceleratetheachievementoftheSustainableDevelopmentGoalsandtherealizationofthepromiseoftheUnitedNationsCharterandtheUniversalDeclarationofHumanRights.

Newtechnologiesholdthepromiseofthefuture,fromclimateactionandbetterhealthtomoredemocraticandinclusivesocieties.Asthisreporthighlights,theguidingprincipleofthe2030AgendaforSustainableDevelopmenttoleavenoonebehindprovidesacompellingincentiveforharnessingfrontiertechnologiesforsustainabledevelopment.

Letususethemwisely,forthebenefitofall.

AntónioGuterres

Secretary-General

UnitedNations

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PREFACE

TheTechnologyandInnovationReport2021criticallyexaminesthepossibilityoffrontiertechnologiessuchasAI,roboticsandgene-editingwideningexistinginequalitiesandcreatingnewones.Thedebateabouttherelationshipbetweentechnologicalchangeandinequalitieshasalongtraditionindevelopmentstudies.However,thebroadreach,theseeminglyunlimitedandtightintegrationofthesenewtechnologiesthroughdigitalizationandconnectivity,andtherapidpaceoftechnologicalchangehaveputindoubttherelevanceoftheexperiencesofprevioustechnologicaltransformationstoinformthecurrentpolicydebate.

Frontiertechnologiescanbringenormousbenefitstothelivesofpoorpeople.Prospectsareimmenseinagriculture,health,education,energyandotherareasofdevelopment.Therearenumerousexamplesonsuccessfullymobilizingfrontiertechnologies.However,manyofthesetechnologydeploymentremainsatpilotlevel.ThisReportdiscusseshowtoscalethemup,howtobringtheirbenefitstothepoor,whatgovernmentinterventionsandbusinessmodelswork,whatgoodpracticesandlessonsarethere,andwhatthemissinglinksare.

Thereisalsoaconcernthatautomation,AI,roboticswilldestroyjobsandwiththatthedreamofpoorpeopleindevelopingcountriestogetoutofpoverty.Thereisafearthatthechasmbetweenhavesandhavenotswouldwiden,whilebenefitsarecapturedbyafewwithskillsandcapital.ThisReportdiscussestheimpactofthesetechnologiesonlabourmarketsandhowtopreparetheworkforcetobenefitfromthefrontiertechnologiesandminimizetherisks.

TheReportfocusesonlowandmiddle-incomedevelopingcountriesandleastdevelopedcountries,aswellasonthemostvulnerablesegmentsofsocieties,whileprovidingdiscussionontheeffectsonhigh-incomecountriesaspartsofthebroadercontextandmajordriversoffrontiertechnologies.

TheReportarguesthatfrontiertechnologiesareessentialforsustainabledevelopment,buttheyalsocouldaccentuateinitialinequalities.Itisuptopoliciestoreducethisriskandmakefrontiertechnologiescontributetoincreasingequality.Low-andmiddle-incomedevelopingcountriesandtheleastdevelopingcountriescannotaffordtomissthenewwaveofrapidtechnologicalchange.

Harnessingthisnewtechnologicalrevolutionwillrequirecountriestopromotetheuse,adoptionandadaptationoffrontiertechnologies.Abalancedapproachbuildingarobustindustrialbaseandpromotingfrontiertechnologiesisamustforsuccessinthetwenty-firstcentury.

MukhisaKituyi

Secretary-General

UnitedNationsConferenceonTradeandDevelopment

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ACKNOWLEDGEMENTS

TheTechnologyandInnovationReport2021waspreparedundertheoverallguidanceofShamikaN.Sirimanne,DirectoroftheDivisiononTechnologyandLogistics,byateamcomprisingClovisFreire(teamleader),BobBell,DaisukeMaruichiandLauraCyron.SusanCozzens(ProfessorEmerita,GeorgiaTech)andAlfredWatkins(ChairmanoftheGlobalSolutionsSummit)werepartoftheteamasconsultantexternalexperts.AbiySolomon,EugeniaNunez,KamalTahiriJouti,KatalinBokor,MariaGodunova,MiguelPerez-LudenaandXinxinPanprovidedsubstantiveinputs.TheworkoftheteamwassupervisedbyAngelGonzálezSanz;DongWu(until15July2020)andLipingZhang(from15July2020)providedsubstantivecommentsandsuggestions.

UNCTADgreatlyappreciatesthecontributionsintheformatofboxesprovidedbyDameWendyHall(UniversityofSouthampton),DavidAutor(MIT),EdwardLorenz(UniversityofC?ted'Azur),JacobRub?kHolm(AalborgUniversity),RobertaRabellotti(UniversitàdiPavia),andSoniaJorge,NathaliaFoditsch,EleanorSarpongandMaikoNakagaki(A4AI).ThewrittencontributionsbyAlizaInbal(PearsProgramforGlobalInnovation)arealsoacknowledgedwithappreciation.

Commentsandsuggestionreceivedfromexpertsattendinganad-hocexpertconsultationheldinDecember2019inGeneva,andtheonlinepeerreviewmeetingorganizedinDecember2020,arealsogratefullyacknowledged.Theexpertsincluded:CarloPietrobelli(UniversityRomaTre),CatherineAdeya(StrathmoreUniversity),ChuxDaniels(SPRU-UniversityofSussex),DominiqueForay(EPFL),DorotheaKleine(SheffieldInstituteforInternationalDevelopment),EdwardLorenz(UniversityofC?ted'Azur),EleanorSarpong(A4A),FernandoSantiago(UNIDO),GeorgeEssegbey(CouncilofScienceandIndustrialResearchofGhana),IrmgardNübler(ILO),JacobRub?kHolm(AalborgUniversity),Jean-EricAubert(FrenchForesightSociety),KorneliaTzinova(UNESCO),LudovicoAlcorta(UNU-MERIT),MarcoVivarelli(UniversitàCattolicadelSacroCuore),MartaPerezCuso(ESCAP),PhillippaBiggs(ITU),RobertaRabellotti(UniversitàdiPavia),andTonyRoberts(InstituteofDevelopmentStudies).

Valuablewrittencommentsandsuggestionswerealsoprovidedbythefollowingexperts:FayeDuchin(RensselaerPolytechnicInstitute),RichardAlexRoehrl(DESA),RobertD.Atkinson(InformationTechnologyandInnovationFoundation).

CommentsreceivedfromotherUNCTADdivisionsaspartoftheinternalpeerreviewprocess,aswellascommentsfromtheOfficeoftheSecretary-General,areacknowledgedwithappreciation.ValuablecommentsandsuggestionsregardingtheReport’sstatisticalmethodsandframeworkweregivenbyFernandoCantu-Bazaldua,NourBarnatandStephenMacFeely.CommentsandsuggestionsbythefollowingUNCTADstaffarealsogratefullyacknowledged:AnidaYupari,DanTeng’o,EbruGokce-Dessemond,IsyaHanumKresnadiandPatrickOsakwe.UsefulwrittencommentswerealsogivenbyJanHoffmannandTorbj?rnFredriksson.

UNCTADgreatlyappreciatestheinputsbytheUnitedNationsMajorGroupforChildrenandYouth(UNMGCY)andtheJournalofSciencePolicyandGovernance(JSPG)throughtheJSPG-UNMGCYSpecialIssueonImpactsofEmergingTechnologiesonInequalityandSustainability.

UNCTADalsogreatlyappreciatestheinputsprovidedbyateamofBSc,MSc,andPh.D.studentsfromWageningenUniversityandResearch(WUR)andtheStateUniversityofNewYorkCollegeofEnvironmentalScienceandForestry(SUNY):AlessandroCaprini,AneeqahTariq,AnnaRossi,BlueDonaton,CeciliaConsalvo,ChiaraFiorino,CléaMontanari,CitraSiagian,CorryRothuizen,GarimaChotani,JaredGambo,JessicaBreslau,JulieRomano,LorenaEsquivias,LinnevanderMeulen,MarvinLeonMatheis,MaxvanDeursen,MichelleViera,RabiaMunsafKhan,SaraMancinelli,ShanelKhaliq,SofiedeWit,andWesselvanDorst.

ResearchsupportwasprovidedbyFanYang,GiulioDalleDonne,JosephineLoche,LouisaRichards,RonakShahsavarandWeijingYeduringtheirinternshipatUNCTAD.

ThemanuscriptwassubstantivelyeditedbyPeterStalker.MagaliStuderdesignedthecover.InfographicswerepreparedbyMagaliStuderandCarlosReyes.MalouPasinosprovidedadministrativesupport.

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CONTENTS

Note iii

Foreword iv

Preface v

Acknowledgements vi

Overview xiii

1.

Catchingthewaves xiii

2.

Forgingaheadatthedigitalfrontiers xvi

3.

Humansandmachinesatwork xviii

4.

Innovationwithequity xxi

5.

Preparingforthefuture xxiii

I.

CATCHINGTECHNOLOGICALWAVES 1

A.

PROSPERITYAMIDSTPOVERTY 4

B.

MULTIFACETEDINEQUALITIES 5

C.

WIDEINCOMEGAPS 8

D.

DRIVERSOFINCOMEINEQUALITY 11

E.

REDUCINGINEQUALITY 12

II.

FORGINGAHEADATTHEDIGITALFRONTIERS 15

A.

RAPIDGROWTHOFFRONTIERTECHNOLOGIES 18

B.

AFRONTIERTECHNOLOGIESREADINESSINDEX 22

III.

HUMANSANDMACHINESATWORK 33

A.

TECHNOLOGIESAFFECTINGINEQUALITYTHROUGHJOBS,WAGESANDPROFITS 35

B.

RISKSOFUNEMPLOYMENTANDINCREASINGINCOMEDIVIDES 37

1.

Automationtakingjobs 38

2.

Jobpolarization 40

3.

Thegigeconomyandanerosionoflabourrights 43

4.

Marketandprofitconcentration 44

5.

AIandglobaleconomicinequalities:threeprobablescenarios 44

6.

Wideningtechnologicalgaps 45

C.

CHALLENGESFORDEVELOPINGCOUNTRIES 45

1.

Demographicchanges 45

2.

Lowertechnologicalandinnovationcapacities 46

3.

Slowdiversification 49

4.

Weakfinancingmechanisms 51

5.

Intellectualpropertyrightsandtechnologytransfer 52

D.

ACCELERATINGTOWARDSINDUSTRY4.0 52

1.

Settingstrategicdirections 53

AI,bigdataandIoT 54

Biotechnology–nationalprogrammes 55

Biotechnology–Internationalprogrammes 55

2.

Aligningnationalinnovationandindustrialpolicies 56

3.

Findinginvestors 58

4.

Preparingtheworkforce 58

5.

ProvidingIncomesupport 60

Negativeincometax 60

Universalbasicincome 61

Publicemployment 61

6.

Wealthredistribution 61

7.

Ensuringequitableaccesstopatentedtechnologies 62

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IV.

INNOVATIONWITHEQUITY 69

A.

TECHNOLOGIESAFFECTINGINEQUALITIESTHROUGHDESIGNANDACCESS 71

B.

RISKSOFBIASANDDISCRIMINATION 73

1.

AIalgorithmswithbuiltinbias 73

2.

Genomicinequalities 75

R&Dinequalities 75

Datainequalities 75

Therapyinequalitiesduetonon-affordability 75

3.

Geneeditingandintellectualproperty 75

4.

Ethicalquestionsingeneediting 76

C.

CHALLENGESFORDEVELOPINGCOUNTRIES 77

1.

Higherincomepoverty 77

2.

Digitaldivides 78

3.

Shortageofskills 79

D.

DIRECTINGTOSUSTAINABLEDEVELOPMENT 80

1.

Settingethicalframeworks 80

2.

Conductingtechnologyforesightandassessments 82

3.

Supportinginclusiveinnovation 83

4.

Deployingatscale 84

5.

Improvingpublicservices 85

6.

Bridgingdigitaldivides 86

7.

InvestinginSTIskills 89

8.

Supportingactivesocialcitizens 89

V.

PREPARINGFORTHEFUTURE 95

A.

KEYREQUIREMENTSFOREQUITABLEOUTCOMES 97

1.

Nationalgovernance 97

2.

Internationalcooperation 97

3.

Socialactivism 97

B.

KEYPOLICYAREAS 98

1.

Guidinginnovationtowardsreducinginequalities 98

SetstrategicdirectionsusingtheSDGs 98

Extendfrontiertechnologiestothepoor 98

Usefrontiertechnologiesinthepublicsector 98

Supportinclusiveinnovationsystems 99

2.

Adoptingfrontiertechnologieswhilemasteringexistingtechnologies 99

Strengthennationalinnovationsystems 99

AlignSTIandindustrialpolicy 99

Developdigitalskills 99

Connecteveryonefocusingonthefurthestbehind 100

3.

Mitigatingrisks 100

Strengthensocialprotection 100

Easeworkforcetransitions 100

Anticipatethefuture 101

C.

PRIORITIESFORINTERNATIONALCOOPERATION 101

1.

BuildstrongernationalcapacitiesinSTI 101

2.

Smoothtechnologytransfer 101

3.

Increasewomen’sparticipationinSTEM 101

4.

Improveforesightandtechnologicalassessment 102

5.

Promoteinclusivedebate 102

D.

CONCLUSIONS 102

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ANNEXA

CONCEPTUALFRAMEWORK 10

6

ANNEXB

FRONTIERTECHNOLOGYTRENDS 10

9

A.

SUMMARYOFFRONTIERTECHNOLOGIES 110

1.

ArtificialIntelligence(AI) 110

2.

InternetofThings(IoT) 111

3.

Bigdata 112

4.

Blockchain 113

5.

5G 114

6.

3Dprinting 115

7.

Robotics 116

8.

Drone 117

9.

Geneediting 118

10.

Nanotechnology 119

11.

Solarphotovoltaic 120

B.

TECHNICALNOTE 121

1.

Publications 121

2.

Patents 121

3.

Marketsize 122

4.

Frontiertechnologyproviders 122

5.

Frontiertechnologyusers 122

ANNEXC

HOWTECHNOLOGIESAFFECTINEQUALITIESINTHEUSER’SPERSPECTIVE 1

25

ANNEXD

AIETHICSFRAMEWORKS,GUIDELINES,ANDSTATEMENTS 1

28

STATISTICALAPPENDIXREADINESSFORFRONTIERTECHNOLOGIESINDEX 1

37

A.

RESULTSOFTHEREADINESSFORFRONTIERTECHNOLOGIESINDEX 137

B.

READINESSFORFRONTIERTECHNOLOGIESINDEXRESULTSBYSELECTEDGROUPS 141

C.

TECHNICALNOTE–READINESSFORFRONTIERTECHNOLOGIESINDEX 144

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FIGURES

FigureI1

Thegreatdivide,andwavesoftechnologicalchange 3

FigureI2

Gapsbetweencountrygroups,selectedSDGindicators 6

FigureI3

Inequalitywithincountries,selectedSDGindicators 7

FigureI4

Increasingincomeinequality,ChinaandIndia(shareofpre-taxnationalincome,percentage) 10

FigureI5

Contributionofinequalitybetweenandwithincountriestoglobalinequality(percentage) 10

FigureI6

RiseofaverageGDPpercapitaindevelopinganddevelopedeconomies 11

FigureI7

Technologicalrevolutionsandinequalities 12

FigureI8

IncomeinequalitymeasuredbytheGiniofmarketanddisposableincomes,2017orlatest 13

FigureII1

Marketsizeestimatesoffrontiertechnologies,$billions 18

FigureII2

Numberofpublicationsbyfrontiertechnology 20

FigureII3

Numberofpatentsbyfrontiertechnology 20

FigureII4

Countryshareofpublicationsbyfrontiertechnology(percentage) 22

FigureII5

Countryshareofpatentsbyfrontiertechnology(percentage) 22

FigureII6

Structureofthereadinessindex 22

FigureII7

Averageindexscorebygeographicalgroup 25

FigureII8

Averageindexscorebydevelopmentstatus 26

FigureII9

Correlationbetweentheindexscoreandtheadoptionofselectedfrontiertechnologies,2018 26

FigureII10

Correlationbetweenindexsc