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Knowledge-Based Economic Development:

World Bank Strategy for Achieving Global Competitiveness

Khaled F. Sherif, Sector ManagerPrivate and Finance Development Sector Unit

Eastern Europe & Central Asia RegionThe World Bank

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World Bank Strategy for Achieving World Bank Strategy for Achieving Global CompetitivenessGlobal Competitiveness

The World Bank strategy supports a number of The World Bank strategy supports a number of project interventions that are designed to improve project interventions that are designed to improve a country's ability to:a country's ability to:

Bank projects also support Governments in key Bank projects also support Governments in key areas of policy reform and infrastructure areas of policy reform and infrastructure development along with support for the private development along with support for the private sector in multiple areas including investment and sector in multiple areas including investment and trainingtraining

Establish short- and medium-term programs which produce immediate results in key sectors

Achieve a long-term program which embeds knowledge and ICT-based growth as the primary driver for economic

and social development

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World Bank Strategy for Achieving World Bank Strategy for Achieving Global CompetitivenessGlobal Competitiveness

The strategy comprises a four-pronged approach, The strategy comprises a four-pronged approach, which interfaces across key sectors to wholly assist which interfaces across key sectors to wholly assist in the process of transitioning towards a in the process of transitioning towards a knowledge-based economy:knowledge-based economy:

Improvement of ICT Platform

Promotion and Support of

Innovation Systems

Development of Human Capital

Modernization and Liberalization of the

Economy

–The World Bank approach is in line with e-Europe+ objectives and addresses all The World Bank approach is in line with e-Europe+ objectives and addresses all proposed areas for developmentproposed areas for development

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The World Bank can assist in:The World Bank can assist in:

Investment in ICT infrastructure is key to providing the Investment in ICT infrastructure is key to providing the local populace and businesses with the technology local populace and businesses with the technology tools required to enhancing overall competitiveness, tools required to enhancing overall competitiveness, promoting the use of knowledge for development, and promoting the use of knowledge for development, and enabling the dissemination of knowledge across all enabling the dissemination of knowledge across all sectors of the economysectors of the economy

Improvement of ICT PlatformImprovement of ICT Platform

– Related e-Europe+ Objective: Related e-Europe+ Objective: A cheaper, faster, secure InternetA cheaper, faster, secure Internet

The identification and prioritization of what elements of the ICT platform are underdeveloped and require

investmentTo determine how these needs could be best addressed, in terms of hardware, software and

infrastructureEstablish short- and medium-term programs which

produce immediate results in key sectors

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Improvement of ICT PlatformImprovement of ICT Platform

Networks Access Launch Pad

Mobile Telephony Media Radio/TV Internet

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Promote and Develop ICT Promote and Develop ICT ApplicationsApplications

Enhanced ICT infrastructure can be used to develop applications Enhanced ICT infrastructure can be used to develop applications like the following:like the following:– e-based Government procuremente-based Government procurement– e-based investment promotione-based investment promotion– e-based licensing and registratione-based licensing and registration– e-based pledge registry for secured transactionse-based pledge registry for secured transactions– e-based credit information system e-based credit information system – e-based tax information and payment systeme-based tax information and payment system– Facilitating the use of digital signatures Facilitating the use of digital signatures – Increasing linkages of domestic institutions of higher learning and Increasing linkages of domestic institutions of higher learning and

research with those abroad research with those abroad – Evaluating the potential for clusters to assist with links between Evaluating the potential for clusters to assist with links between

research and production research and production

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Modernization and Liberalization Modernization and Liberalization of the Economyof the Economy

Bank assistance can help provide economic (and other) Bank assistance can help provide economic (and other) mechanisms to encourage the competitive, and mechanisms to encourage the competitive, and cooperative, use of information throughout all sectors of cooperative, use of information throughout all sectors of the economythe economy

The strategy is designed to support:The strategy is designed to support:

- Related e-Europe+ Objective: - Related e-Europe+ Objective: Accelerate the putting in place of the basic building blocks for the Accelerate the putting in place of the basic building blocks for the Information SocietyInformation Society

Policy reform

Establishing institutions to support the reform process

Achieving macroeconomic stability

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Modernization and Liberalization Modernization and Liberalization of the Economyof the Economy

Competition Policy Tax Policy Regulatory

Environment

Support to SMEs Promotion of FDICredit/ Financial

Sector Development

Governance Standards

Trade/Investment Facilitation

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Promote and SupportPromote and SupportInnovation SystemsInnovation Systems

- Related e-Europe+ Objective:- Related e-Europe+ Objective: Stimulate the Use of the Internet Stimulate the Use of the Internet

Promoting and supporting innovation systems is key Promoting and supporting innovation systems is key to developing a long-term KE framework, and is the to developing a long-term KE framework, and is the underlying means by which to move towards a self-underlying means by which to move towards a self-sustaining information societysustaining information society

This involves enhancing the coordination between This involves enhancing the coordination between government, the private sector and research government, the private sector and research institutions, and the establishment of an environment institutions, and the establishment of an environment which promotes growth through innovationwhich promotes growth through innovation

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Promote and Support Innovation Promote and Support Innovation SystemsSystems

More efficient and effective R&D

Issuance of new patents

Intellectual property development

Innovation systems are key to enhancing productivity Innovation systems are key to enhancing productivity and efficiency within the economy, and include:and efficiency within the economy, and include:

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Development of Human CapitalDevelopment of Human Capital

The development of human capital is essential in The development of human capital is essential in establishing a skilled and knowledgeable workforce establishing a skilled and knowledgeable workforce which can continuously participate in the process of which can continuously participate in the process of effectively using and generating knowledgeeffectively using and generating knowledge

The strategy focuses on:The strategy focuses on:

-Related e-Europe+ Objective:-Related e-Europe+ Objective: Investing in People and Skills Investing in People and Skills

Basic literacy and enrollment in primary and secondary education

Tertiary education

Global distance learning

Life long learning

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Development of human capital emphasizes two primary areas:Development of human capital emphasizes two primary areas:

Development of Human CapitalDevelopment of Human Capital

• Extending the reach of computers and ICT-equipment to basic education schools

• Assisting in curricula development and providing access to learning materials

• Providing support for research within higher institutions• Developing centers with the capacity for providing distance learning

courses

EducationEducation

• Training staff within academic institutions for the use of technological devices

• Establishing a program for the training of current managers and professionals in career and industry-specific contexts

• Providing investments to support the establishment of tailored training programs

TrainingTraining

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World Bank Strategy:World Bank Strategy:Project InterventionsProject Interventions

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Key ElementsKey Elements

The Bank emphasizes working with the client to:The Bank emphasizes working with the client to:

Depending on client needs, Bank intervention can come in Depending on client needs, Bank intervention can come in the form of…the form of…

Develop a vision for the country’s progression towards a knowledge-based economy

Develop a prioritized strategy which identifies key areas of reform and progress

Build short- and medium-term immediate wins in support of the long-term strategy

A KE LIL of approximately $5 million

A series of two-to-three investment loans (approximately $50-100 million each)

……or anywhere in betweenor anywhere in between

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Stakeholders TargetedStakeholders Targeted

Businesses

Community Educational Institutions

Government

G2G

G2C

G2B

E2B

B2B

G2E

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Project Components:Project Components:Improving Access to ICTImproving Access to ICT

Improving access to ICT would target enhancing Improving access to ICT would target enhancing and improving connectivity in both urban and and improving connectivity in both urban and rural areasrural areas

Current NetworkCurrent NetworkImproved NetworkImproved Network

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Project Components:Project Components:Improving Access to ICTImproving Access to ICT

The Bank would assist the client in: The Bank would assist the client in:

The identification of key areas for connectivity

The development of a comprehensive country-wide network that leverages resources from each of the

network nodes

The development of telecenters, advisory centers, etc. which would be needed

Hardware Solutions

Software Solutions

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Project Components:Project Components:Development and Promotion of Government ServicesDevelopment and Promotion of Government Services

Development of government services can involve Development of government services can involve assisting the government in building e-services assisting the government in building e-services from scratch, or assisting in the further from scratch, or assisting in the further development of activities which are still in development of activities which are still in preliminary stages.preliminary stages.

This includes a wide range of services, such as This includes a wide range of services, such as e-procuremente-procurement, , e-registratione-registration, , e-services within e-services within minoritiesminorities, the use of , the use of digital signaturesdigital signatures, etc., etc.

The focus of these activities would be on a G2G, The focus of these activities would be on a G2G, G2B, G2C and G2E levelG2B, G2C and G2E level

Promotion of these activities is also a key priority, Promotion of these activities is also a key priority, and supported by other initiatives on the and supported by other initiatives on the “improving access to ICT” front“improving access to ICT” front

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Project Components:Project Components:e-commerce and Innovation Supporte-commerce and Innovation Support

This component places the enterprise sector, in This component places the enterprise sector, in particular SMEs, at the center of innovation particular SMEs, at the center of innovation efforts efforts

Activities would focus on building a number of Activities would focus on building a number of innovation support programs for enterprises, with innovation support programs for enterprises, with the objective of:the objective of:

Stimulating the demand from enterprises for technology support

Helping to build the capacity of local ministries and partner organizations to provide effective support and

advice to SMEsBuilding stronger relationships between enterprises

and universities

Curriculum revision

Provision of learning materials

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Project Components:Project Components:e-commerce and Innovation Supporte-commerce and Innovation Support

The component would provide project funding for The component would provide project funding for new technology support mechanisms such as:new technology support mechanisms such as:

Technology Development Programs which would provide funding mechanisms for technology projects

proposed by enterprises

A Technical Support Services Program which would provide technological and business advice and

guidance to enterprises embarking on technology projects.

An Intellectual Property (IP) Advisory Program which would be targeted specifically at enterprises to raise awareness of issues related to intellectual property

rights.

A higher level program to increase the participation of enterprises in local and international R&D programs

such as the EU 6th Framework Program

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Project Components:Project Components:Developing Skills for the Knowledge EconomyDeveloping Skills for the Knowledge Economy

This activity would focus on assisting members This activity would focus on assisting members of the local population (including pupils, teachers, of the local population (including pupils, teachers, owners of SMEs) to develop and use digital owners of SMEs) to develop and use digital literacy skills to enhance their daily livesliteracy skills to enhance their daily lives

It can include a wide range of activities, such as:It can include a wide range of activities, such as:

Training for students and educators

Training for technology support staff

Training for SME owners/business professionals

Curriculum revision

Provision of learning materials

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Strategic Summary Strategic Summary

The Bank’s support strategy emphasizes The Bank’s support strategy emphasizes addressing client goals and objectives to enable addressing client goals and objectives to enable them to become more globally competitive and them to become more globally competitive and develop a sustainable strategy for long-term develop a sustainable strategy for long-term growthgrowth

The key lies in tackling specific client needs, and The key lies in tackling specific client needs, and developing local competitive advantagesdeveloping local competitive advantages

The emphasis is on developing a generational The emphasis is on developing a generational shift, which enables emerging countries to achieve shift, which enables emerging countries to achieve the same success that has been enjoyed by the same success that has been enjoyed by current leaders in the sphere of knowledge current leaders in the sphere of knowledge economyeconomy