The global economy experienced rapid growth over the past decade, and the Asian Development Bank noted that while critical infrastructure in many countries is still far from adequate, there has been rapid economic growth and industrialization across the region.
Despite this progress, the Global Innovation Index 2020 report showed that investments in innovation are still not enough to bridge the current gap, and that emphasis must continue to be placed on advancing infrastructure and in the technology and communication sectors to drive global economic growth.
Now, in 2021, the Global Innovation Index shows that governments and businesses in many parts of the world have increased their investments in innovation, amid significant economic and human losses due to the pandemic. This reflects the increased awareness of the importance of new ideas in overcoming the crisis and ensuring long-term economic development.
In this article, we examine the role that industry, innovation and infrastructure are playing in driving global economic growth.
Understanding the Sustainable Development Goals: SDG 9 and the importance of industry, innovation and infrastructure
The Sustainable Development Goals (SDGs) are goals created by the United Nations in 2015 to provide a detailed framework for global public, private and civil society actors to achieve lasting change. The ninth goal (SDG 9) is particularly focused on achieving “Industry, Innovation and Infrastructure”.
The aim of SDG 9 is to reduce poverty and bridge the gap between the rural and urban sectors, as well as to ensure access to essential infrastructure services such as clean water, sanitation, energy and transportation. Through SDG 9, the UN aims to achieve sustainable and equitable economic growth, improve living standards and increase employment opportunities.
To realize this goal, it is essential that developing countries have the necessary infrastructure to support industry and innovation. This includes having a strong communications network, quality roads, water and sanitation systems, and access to education and training. These infrastructures not only enable businesses to operate more efficiently, but also help to create a better quality of life for citizens.
How infrastructure supports economic growth
Infrastructure plays an essential role in a country’s growth, as it stimulates the overall economy by making goods and services more affordable and accessible. That is why investment in essential infrastructure is considered a vital part of economic growth.
Good infrastructure also helps generate employment opportunities and encourages small businesses to prosper. For example, improved roads provide better transport links, making it easier for people to travel to and from work, as well as encouraging people to live and work in different parts of the country.
In addition, growth in non-farm activities is often driven by agricultural growth, and resources channeled to small towns can play a catalytic role in rural transformation, as intermediate and industrial agro-development points.
The role of industry and innovation
Industry and innovation are also essential to a country’s long-term development. Industries such as manufacturing, technology and communications can help create jobs and drive economic growth. In addition, the development of new products, services and technologies can help increase productivity, which further contributes to economic development.
To capitalize on this, governments need to invest in research and development, and provide subsidies and incentives to innovative companies. According to the 2017 Global Innovation Index, investment in research and development as a percentage of GDP doubled in the last decade, indicating a commitment to innovation by governments around the world.
In addition, greater access to digital technologies such as cloud computing, big data, artificial intelligence and 5G networks can help businesses operate more efficiently and make better decisions. This is especially important for emerging markets, as these technologies can help bridge the technology gap between these countries and developed markets.
As we can see, industry, innovation and infrastructure are essential for global economic growth. As Costa Rica has found, a commitment to innovation and investment in essential infrastructure has done much to boost the country’s development.
Therefore, all nations must prioritize industry and innovation and invest in infrastructure to ensure sustainable economic growth.