The least developed countries (LDCs) are a group of countries (presently 50 States) that have been officially identified by the United Nations as "least developed" in the light of their low income, weak human assets, and high economic vulnerability.
UNCTAD, in past LDC Reports, has taken the view that the key to sustained economic growth and poverty reduction in LDCs is the development of productive capacities and related creation of productive employment. The Least Developed Countries Report 2007 corroborates this view by focusing on knowledge accumulation, technological learning and the ability to innovate as vital processes toward genuine productive capacity development in these countries.
Knowledge is becoming more and more important in the global sphere of competition and production. In this context, there is a danger that LDCs will be increasingly marginalized if they do not enhance the knowledge content of their economies and achieve economic diversification through learning and innovation.
The Report shows that the current pattern of technology flows to LDCs through international trade, foreign direct investment and intellectual property licensing does not contribute to narrowing the knowledge divide. Sustained economic growth and poverty reduction are not likely to take place in countries where viable economic re-specialization would remain impossible in the absence of significant progress in technological learning and innovation capacity-building.
The Report suggests that national governments and development partners could meet this challenge, notably through greater attention to the following four key policy issues:
- How science, technology and innovation policies geared toward technological catch-up can be integrated into the development and poverty reduction strategies of LDCs.
- How stringent intellectual property regimes internationally affect technological development processes in LDCs, and how appropriate policies could improve the learning environment in these countries.
- How the massive loss of skilled human resources through emigration could be prevented.
- How knowledge aid (as part of official development assistance) could be used to support learning and innovation in LDCs.
The Report is the first comprehensive insight into the development objective of technological learning and innovation capacity-building in LDCs. It is intended to increase awareness of this issue and enrich the policy dialogue toward the new "paradigm shift" on poverty reduction through productive capacity-building.