The Relevance of Science in Development: Scientific Development Favors Economic Prosperity, but Not Necessarily through its Effect on Technological Knowledge in Middle Income Countries

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Author(s): Klaus Jaffe (Universidad Simón Bolívar, Venezuela)
Copyright: 2014
Pages: 17
Source title: Economic Behavior, Game Theory, and Technology in Emerging Markets
Source Author(s)/Editor(s): Bryan Christiansen (PryMarke, LLC, USA)and Muslum Basilgan (Uludağ University, Turkey)
DOI: 10.4018/978-1-4666-4745-9.ch001

Keywords: Business & Management / Business Science Reference / Economics & Economic Theory / Economics and Economic Theory

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Abstract

Scientific knowledge and technical expertise promote the wealth of nations. The traditional view is that science allows the expansion of technology, which, in turn, promotes economic development. This chapter shows that: 1) the scientific productivity of a country correlates more strongly with gross national income per capita than its technological sophistication; 2) science is important for economic growth among developed economies, whereas technical complexity is more important for the economic development of poorer countries; 3) scientific productivity of countries correlates more strongly with present and future wealth than indices reflecting its financial, social, economic, or technological sophistication; and 4) middle-income countries with higher relative productivity in basic sciences such as physics and chemistry have the highest economic growth in the following five years compared to countries with a higher relative productivity in applied sciences. No simple direct causal relationship between scientific productivity and economic growth could be detected. The results are best explained by assuming that science favors economic development by providing society with a more rational atmosphere, allowing the implementation of sound policies and institutions, and/or that rational societies with successful economic policies are also the ones giving priority to basic natural sciences.

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The Relevance of Science in Development: Scientific Development Favors Economic Prosperity, but Not Necessarily through its Effect on Technological Knowledge in Middle Income Countries

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