1. Entrepreneurship and Innovation in Developing Countries : How the ITA can help Bruno Lanvin, the World Bank WTO, Geneva – 18 October 04

2. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

3. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

4. Engines of globalization

5. Four Ways of Being Global (2003) Source: Foreign Policy and A.T. Kearney

6. IsGlobalization Slowing Down? Globalization advanced briskly until 1997, when the financial crises that hit various developing regions weakened trade flows and undercut gains in global integration. So why did overall integration still increase during this period? Simple: Technology has become the engine of globalization. Technology factors: Percentage of population online, number of internet hosts per capita, and number of secure servers per capita Non-technology factors:Trade in goods and services, capital flows, and personal contact. Source: Foreign Policy and A.T. Kearney

7. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

8. Obstacles to entrepreneurship in DCs Source: World Development Report, 2005 (World Bank)

12. Sources of growth Growth in inputs Efficiency in factor allocation Innovation (useful knowledge) Vehicles (trade, FDI,..) Cross-border education etc …

13. Rule of Law Corruption Growth Innovation Entrepre neurship Regulatory Competition Framework Governance T of Tech Openness IPRs Exports International competition Trade Policy Niches & Alliances F.D.I. Domestic savings Monetary & Fiscal Policies Macro- Economic Policies Capital Formation Global Reach Growth, Innovation, Enterpreneurship

14. The crucial role of innovation Technological innovation Disruptive vs incremental ? Individual vs collective Process innovation Non technological innovation Shifting value along the chain

15. Source: World Development Report, 2005 (World Bank)

17. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

20. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

22. 8.00 Leaders Facilitators y = 0.6839x + 1.9399 2 R = 0.3991 GUA ZIM PAR BOL VEN ARG HON ECU PAN EGY ELS PHI PER INO TUR ROM NIC BAN NIA MAU UKR RUS URU GRE BUL DOM JOR SLK POL COS COL TRI MEX SAF SLV LIT LAT VIE JAM THA INI CHL ITA BEL GER AUT NOR SRI CZE LUX HUN CHN IRE MLT POR BRA NWZ JAP EST NET AUL FRA SPA DEN KOR SWI ICE SWE USA HKG UK CAN ISR TAI FIN SIN 2.00 3.00 4.00 5.00 6.00 7.00 2.003.004.005.006.007.00 Note : the ‘Government’ variable of the GITR index has been used as proxy for Government leadership (x), whereas ‘Competition in telecoms’ has been used as an indicator of the effectiveness of Governments as facilitators (y) First circle (top performers) Second circle (the contestants) Third circle (ready or not) Strong Public Sector Source : World Economic Forum/INSEAD/infoDev

23. Multi-purpose IT The example of trade facilitation Trade competitiveness Attraction of FDI Governance (transparency, accountability,..)

24. Potential for additional off-shoring ? In G-7 countries, 1-5% of active population could be affected (World Bank 1995) Maximum number of current jobs affected in US: 14 mn (Bardhan and Kroll 2003) Projected number of US services jobs outsourced by 2015 : 3.4 mn (Forrester 2004) In financial services alone, 2 mn jobs could be affected during the next 5 years (Deloitte & Touche 2003) 70% of the biggest 1000 firms have not outsourced services jobs towards lower-cost countries Delayed cost-savings measured are estimated at 20-40% Source : World Investment Report, 2004 (UNCTAD)

25. IT and development Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework Issues and challenges ahead

26. How can ITA help ? How is 2004 different from 1996 ? Globalization becoming information-centric (competitiveness, efficiency, governance) Life-cycle of IT products becoming shorter (=> lesser tolerance to procedural obstacles) Mainstreaming of IT as a development tool (DOT Force, MDGs, WSIS) Proper regulatory and legal frameworks have proved their power to bring prices down internally ITA can contribute to turn all of the above into powerful instruments for development

27. Merci blanvin@worldbank.org