Friends of Europe discuss taking innovation to developing countries
Friends of Europe held a public meeting on 24 January where participants discussed 'Technology, globalisation and inclusion: is Innovation a development tool?' The talk rounded on three main themes - barriers to trade, government intervention and education, with each speaker taking a different road through the three subjects. The invited speakers were senior vice-president of Microsoft, Brad Smith, Publisher of The Economist, Andrew Rashbass and Secretary General of the European trade Union Federation, John Monks. Mr Rashbass began the discussion, setting out his belief that trade has many of the answers to development, and that trade will boost the economies of both rich and poor countries. 'In poor, sub-Saharan Africa, technology is not the problem - issues of health, security, food and trade liberalisation stand in the way of greater development. Here in the western world, there needs to be deregulation and low taxation - you can't legislate for innovation. For rich and poor countries, the most important factor is trade deregulation and how you get government out of the way, not in the way,' he said. Brad Smith looked towards education as a means of pulling developing countries into the developed world. 'Everywhere you go in the world, people are asking the same question, 'How do we compete?' And the answer is to be cheaper or better. In North America and Japan, many companies compete simply by being better, but many emerging economies manage to be both cheaper and better. Every country can invest in its education - which provides services to the world. We need to convert IQ to IP [intellectual property] in the future, and we need the government there to plug the gaps in the market.' Finally, John Monks wondered how the number of losers could be minimised, directly challenging Mr Rashbass' ideas on free trade. 'For the young and affluent, a global society is a great thing. However, for the average blue collar worker, this is not the case at all. While education is important, it is a daunting prospect for those in shrinking industries now. Big companies find globalisation good news, and there is no bigger red carpet than to China. Profits are high, but more regulation is necessary. Raising standards could be the key to investment.' Mr Rashbass warmed to his theme, pointing out that in economic terms, there are no losers. 'Is growth a zero-sum game? Does one trading partner grow at the expense of another? If you take the example of trade with India - both sides benefit. When a single Indian area grows, the whole economy does and net growth is positive, not zero-sum. There is a role for government to give a safety net to the losers, but if you start from the premise that trade is good, then you start to think how you will make that happen. Globalisation causes the global GDP to grow, including in the rich countries. If you try to put up fences, everyone loses.' Mr Smith sought to place government back in the mix: 'Only the government can put up certain fences, for example in education. The market does not address basic research. Governments need to invest more in basic research and countries that do this will succeed. In technology areas, governments do need to fill the gaps. By the end of the century, the uncertainties of wealth will lessen. This is evidence of a flattening world,' he said. Mr Monks pointed out that although trade may be a win-win situation: some win more than others, 'The big winners of the EU enlargement have been the EU15 countries. There may be casualties, but the growth rates show that the EU is growing well, but overall struggling for success.' In summing up, the Friends of Europe secretary general Giles Merritt looked to 2100, with these words of caution, 'By the end of the century, there will be 9 billion people in the world and none of those 3 billion extra people will be wealthy. There is not yet any consensus on how to transfer our knowledge economy to the rest of the developing world.'
Countries
India, United States