Accelerating the spread of innovations and technologies through trade and investment

Technological progress, trade and foreign investment including FDI are inextricably linked: global trade and foreign investment have greatly accelerated the spread of innovation and technology, while the technological advances especially in the areas of communication, transport, Internet and electronic commerce have been driving the dynamics of international trade. Today, technology continues to reshape international trade. Technology impacts not only what is traded but also how goods and service are traded. Electronic commerce and “paperless” trade are just two examples on how technology is changing the way that trade has been traditionally conducted.

Trade, technology and industrial policies all impact the development of particular sectors and industries and therefore, directly or indirectly, influence technological learning and progress. Historically, these policies have supported a few countries in the region to catch up. While policies today still play an important role for economic development and technological upgrading, some measures that affect trade by protecting domestic markets or promoting exports are prohibited or restricted under multilateral trade agreements.

From an institutional perspective, trade, technology and industrial policies are often made by different ministries or agencies, and they are not necessarily consistent. To achieve national development plan or strategies, these polices must be harmonized and institutional cooperation is essential.