Technology and Innovation Report 2023
The United Nations Conference on Trade and Development (UNCTAD) has warned that green technologies, such as artificial intelligence, Internet of Things, and electric vehicles, may deepen global economic inequality. According to the Technology and Innovation Report 2023 published on March 16, 2023, developed countries benefit the most from these technologies, while developing countries may miss out on economic opportunities if decisive actions are not taken.
The Potential Market of Green Technologies
UNCTAD estimated that green technologies could create a market worth $9.5 trillion by 2030, up from $1.5 trillion in 2020. These technologies can be used to produce goods and deliver services with smaller carbon footprints. The market value of green frontier technologies, such as electric vehicles, solar and wind energy, and green hydrogen, is expected to reach $2.1 trillion in 2030, four times greater than their value today. The market revenues for electric vehicles could rise five times, reaching $824 billion by 2030, from today’s value of $163 billion.
The Disparities Between Developed and Developing Countries
The report found that the total exports of green technologies from developed countries jumped to over $156 billion in 2021 from about $60 billion in 2018. In contrast, exports from developing countries rose to only about $75 billion from $57 billion. Only a few developing countries have the capacity needed to take advantage of frontier technologies such as blockchain, drones, and solar power, according to the ‘frontier technology readiness index’ included in the report. This index ranks 166 countries based on information and communication technology (ICT) skills, research and development, industrial capacity, and finance indicators. High-income economies such as the United States, Sweden, Singapore, Switzerland, and the Netherlands are currently leading the index.
The Readiness of Developing Countries
Several economies in Asia, such as India, the Philippines, and Vietnam, have made important policy changes that have enabled them to perform better than expected, according to their gross domestic product per capita. India remains the greatest performer, ranking 67 positions better than expected, followed by the Philippines (54 positions better) and Vietnam (44 positions better). In contrast, countries in Latin America, the Caribbean, and sub-Saharan Africa are the least ready to harness frontier technologies and are at risk of missing current technological opportunities.
The Importance of Global Cooperation
UNCTAD calls on governments in developing countries to align environmental, science, technology, innovation, and industrial policies. It urges them to prioritize investment in greener and more complex sectors, provide incentives to shift consumer demand towards greener goods, and boost investment in research and development. However, the UN body highlighted that developing countries cannot take advantage of green technologies on their own. Much of the success of their domestic policies will depend on global cooperation through international trade, which would require reforms to existing trade rules to ensure consistency with the Paris Agreement to tackle climate change.
Providing Assistance to Developing Countries
The report urged developed countries to provide a helping hand to their less well-off counterparts and ensure all nations can participate and take full economic advantage of the green tech revolution. International trade rules should permit developing countries to protect emerging green industries through tariffs, subsidies, and public procurement, so that they not only meet local demand but also reach the economies of scale that make exports more competitive.
Category: Reports & Indexes Current Affairs