Resource information
In broad terms, the sources of economic
growth are well understood but relatively few countries have
succeeded in effectively harnessing this knowledge for
policy purposes so as to sustain high rates of growth over
an extended period of time (commission on growth and
development 2008; Yusuf 2009a). This study argues, however,
that a high growth strategy which puts technology upgrading
and innovation at the center might warrant a different
approach from the one currently favored. It derives from
the experience of global cities such as New York and London
and the empirical research on industrial performance and on
innovation. This has yielded four significant findings:
first, monosectoral services based economies grow slowly
because they benefit less from increases in productivity and
from innovation. Second, manufacturing industries producing
complex capital goods, electronic equipment, and
sophisticated components are more Research and Development
(R&D) intensive, generate many more innovations, are
more export oriented, have a solid track record of rising
productivity, and having achieved competitiveness, are in a
better position to sustain it because the entry barriers to
these industries tend to be higher. By giving rise to dense
backward and forward linkages these industries can serve as
the nuclei of urban clusters and maximize employment
generation. Third, industrial cities create many more jobs
for a middle class and tend to have a more equal
distribution of income than cities which are dominated by
services. Fourth, and finally, cities with a world class
tertiary education and research infrastructure linked to
industry, are more resilient in the face of shocks, more
innovative, and better able to reinvent themselves.
