7 Foundations of Economic Development
In the preceding section, we investigated the quantification of a nation’s economic activities and the distribution of economic value across its populace. The emergence of Gross Domestic Product (GDP) as a metric gained prominence, particularly post-World War II, becoming a standard measure in many countries. However, delving deeper into history reveals a stark contrast.
Before the 1750s, for thousands of years, the idea of economic growth and improving living standards didn’t really exist. People’s income and quality of life stayed the same, hardly changing over centuries. Changes were mainly due to seasonal changes in farming. Good harvests brought better times and more people, but this was often followed by bad times or even famine, reducing the population. This cycle went on for thousands of years, leading to very little improvement in living conditions. Basically, people were stuck in a never-ending loop where farming cycles controlled their well-being.
Expanding on this historical perspective helps us understand the importance of modern economic growth. The continuous economic progress, driven by industrialisation and technological advancements, marks a huge change from the past. Unlike earlier times of repeated stagnation, the last few centuries have seen ongoing growth and development.
This change has not only transformed economies but also profoundly affected society, significantly improving living standards and creating more opportunities for billions of people worldwide. Understanding this historical context gives us valuable insights into the importance of sustained economic growth and the need to support conditions that allow it to continue.
Economic growth and development became significant with the start of the Industrial Revolution in Europe and later in the USA around the 1750s, marking a major turning point in history. Since then, average income per person has grown about one and a half per cent each year, leading to better living standards with each generation. To give some perspective, before the Industrial Revolution, it took thousands of years for the economy to double. Since 1750, however, the economy has doubled every 50 years, showing the remarkable speed of economic progress.
This remarkable path of economic development can be divided into three key phases, each marked by major advancements. The first phase, highlighted by innovations like steam engines, railways, and the mechanisation of cotton processing, marked the beginning of industrialisation, drastically changing production and distribution methods.
The second phase, about a century after the Industrial Revolution, saw electricity become a part of daily life, bringing about an era of unmatched connectivity and efficiency. This period saw cities become widely electrified, transforming industries, transportation, and communication on a global scale.
Now, we are in the third phase, characterised by information technology. With the rise of digital technologies, data-driven insights, interconnected systems, and advancements in artificial intelligence and quantum computing, the economy is undergoing significant transformations. Information technology has not only sped up innovation but also transformed entire industries, enabling new ways of production, consumption, and global interaction. This era is marked by the emergence of smart technologies and powerful computational capabilities that are reshaping how we access, analyse, and leverage data across all sectors.
The path of economic development shows humanity’s constant drive for progress and innovation. Each phase represents a significant leap in our ability to use technological advancements to improve society. As we navigate the digital age, it’s crucial to recognise the ongoing importance of adaptation, collaboration, and forward-thinking strategies in shaping future economic growth and development.
In today’s world, many international organisations work to understand global economic trends and share their findings with the public. There is increased focus on the performance of both individual national economies and the global economy as a whole. This discussion is especially important for many developing countries.
The need for economic development is strongly felt, driven by factors like population growth and the desire for better living standards. However, despite these aspirations and the recognition of the need for economic progress, many nations struggle with stagnation, unable to keep up with the rapid advancements seen in developed economies.
This difference raises important questions within society, especially in underdeveloped nations, about why economic paths have diverged between the West and other regions. People wonder about the missed opportunities and overlooked strategies that have hindered progress and prosperity. Why have some nations prospered and achieved significant wealth, while others remain underdeveloped?
These questions highlight the need to reflect on historical dynamics and the structural inequalities that have shaped global economic systems. They prompt a closer look at the policies, institutions, and external factors that have either helped or hindered economic progress. It is a quest to identify missed opportunities, misguided policies, and systemic barriers that have caused disparities in wealth and living standards.
In many developing or underdeveloped countries, people often ask: “Where did our ancestors go wrong? Why did we fall behind while other nations advanced?” It’s a common frustration – looking at the world today and wondering what missteps led to this gap in progress.
The truth is, yes, somewhere along the way, past generations missed critical turning points in history. They failed to keep up with the milestones that shaped modern civilisation – the very pillars we have discussed throughout this book. We have framed these historical shifts as the five generations of industrial revolutions. If a nation missed the first and second industrial revolutions, it inevitably struggled to keep pace with countries that embraced these transformations early on.
But here’s the real question: what about you? Complaining about the past is easy, but it’s also a mindset of complacency. You are alive right now, in a time when multiple new industrial revolutions are unfolding. Have you embraced them? Have you made an effort to adapt, innovate, or contribute to the world in a meaningful way?
It’s not just about technology – it’s about mindset. Have you elevated your perspective to match that of modern, forward-thinking societies? Have you aligned your values with those of developed nations – their democratic principles, their social progress, and their environmental consciousness? Have you made an effort to contribute to the kind of change that propels societies forward?
If the answer is no, then perhaps it’s not just about what your ancestors missed – but what you are choosing to overlook today. Progress is not something handed down through history; it is something each generation must seize for itself.
The pursuit of economic development in the third world is not just about catching up with the West but also about understanding the complexities of historical legacies, global economic systems, and structural obstacles. It is a journey towards empowerment, resilience, and fair prosperity, guided by a deep understanding of past failures and future goals.
It is disheartening to see that despite years of discussion, there has been little real progress in addressing this issue. Looking back, it’s clear that the development train left centuries ago, yet many countries, especially in the underdeveloped world, have struggled to catch up. While some regions, like the Middle East, have faced unique challenges, neighbouring countries in Asia have made significant strides towards modernisation. However, even in these regions, there remains a significant gap between aspiration and achievement. The lack of representation from underdeveloped nations among economically and socially advanced countries is a harsh reality. Despite being surrounded by examples of progress, these countries have faltered in their quest for development.
This stagnation makes us question where the fault lies. If a critical issue has been under scrutiny for 250 years without progress, it indicates a systemic flaw that must be addressed. The failure to advance suggests a need for deeper introspection and reevaluation of existing strategies. It also highlights the importance of international cooperation and support mechanisms to help nations facing developmental challenges.
Primarily, the issue lies in a deeply ingrained mentality. Until fundamental shifts occur in mindset, a nation may remain stagnant in global standings. Just as economic progress historically unfolded slowly over centuries, so did the evolution of mentalities.
Certain transformations go beyond mere financial investment; they require nurturing a collective consciousness over generations. Trying to speed up such changes with money alone is futile. It is unrealistic, for instance, to expect a globally influential state to emerge from the heart of Africa in a short time, no matter how much money is spent.
Nonetheless, today’s world offers a very different landscape for societal evolution. Rapid advancements in communication and education can speed up transformative change. However, the direction of such change is still debated. Those in power can shape societal narratives for better or worse, depending on their goals. Conversely, individuals have the power to critically analyze and choose their ideological paths. Humanity, endowed with intellect and reason, must engage in continual learning and reflection to steer the course of societal progress.
Until 1945, Korea was under Japanese colonial rule, emerging into independence and then dividing into two nations. After World War II, many prestigious global organisations believed that both South Korea and Japan were limited to rice production, overlooking the educational advancements and literacy rates in these nations. Despite these initial assessments, both countries defied expectations by quickly becoming leading centres of civilisation.
The remarkable transformation of South Korea and Japan shows the potential for rapid economic and social progress within relatively short periods. Their success demonstrates the transformative power of internal dynamics and cultural values. With advancements in technology and unprecedented societal interconnectedness through platforms like social media, the pace of such transformations in today’s world could be even faster.
The historical progress of South Korea and Japan highlights the importance of recognising the hidden potential within societies and the opportunities for swift advancement enabled by modern tools and communication channels. It also suggests that with the right conditions and strategic investments, nations can achieve significant development milestones in remarkably short timeframes.
Reflecting on history, Henry Ford’s founding of the Ford company in 1903 laid the groundwork for significant advancements in the automobile industry. The social dynamics that drove Ford to his achievements highlight the importance of visionary leadership and entrepreneurial spirit. His contributions reshaped the American landscape in the early 20th century, setting a foundation for mass production, economic transformation, and technological progress.
Consider also the example of Steve Jobs, whose adoption into a modest family did not stop him from co-founding Apple and revolutionising technology. This shows the potential of individuals from diverse backgrounds to spark innovation and drive progress. Steve Jobs was the son of a Syrian father. If he had been born in Syria, instead of leading groundbreaking technological advancements, he might have ended up sidelined as a regime sympathiser, possibly imprisoned for dissent against the government, or trying to start anew as a successful immigrant in another country.
Furthermore, the context in which individuals are nurtured plays a crucial role in shaping their potential. If Einstein had been born in less favourable circumstances, his genius might have gone unnoticed, highlighting the importance of providing opportunities and fostering talent regardless of background. Ultimately, the choice lies in how societies nurture and support their visionaries. Investing in education, fostering innovation, and promoting inclusivity are essential for unlocking a nation’s potential for rapid and sustainable development. By embracing diversity, empowering individuals, and fostering a culture of innovation, countries can chart a course toward lasting prosperity and global leadership.
In any nation, the absence of a strong legal framework undermines its potential for economic development. Without economic advancement, progress in the realms of aesthetics, science, and art remains elusive. Central to addressing this is a comprehensive understanding of the state apparatus. The state goes beyond mere power centres or entities to be seized; it represents a collective entity embodying the populace, regardless of the group or political party in power.
For the state to function effectively, it is crucial that civil servants prioritise the interests of the state over partisan affiliations or personal agendas. This means not aligning their actions solely with the political ambitions of any particular party. Instead, civil servants must remain committed to serving the overarching principles and values of the state.
The state operates like a grand symphony orchestra, with diverse voices and perspectives harmonising to create a cohesive whole. It serves as a platform where many viewpoints converge, fostering an environment where the “art of living together” flourishes. In essence, the state embodies the coming together of diverse individuals rallying around common principles, ensuring the preservation of freedom and the celebration of differences.
Therefore, the essence of a well-functioning state lies in safeguarding these differences while upholding shared principles and values. It serves as a guarantor of societal cohesion, providing the necessary framework for economic prosperity and the advancement of culture, science, and art. Ultimately, a state that embraces diversity and nurtures unity paves the way for sustainable development and progress on all fronts.
The role of the state should not be one of authoritarian control or dictating a single ideology to society. Instead, it should act as a facilitator for individuals and non-governmental organisations to collectively shape and design society. When a society is restricted to producing only state-approved art, literature, and scientific or artistic endeavours, it is bound to stagnate and deteriorate over time. Boundaries imposed by the state limit not only physical movement but also intellectual and creative exploration, preventing individuals from reaching their full potential.
Indeed, a society constrained by state-imposed borders remains confined, unable to transcend the limitations set by those in power. Whether these boundaries are physical or ideological, they confine the human spirit, hindering its ability to reach great heights or achieve greatness in various fields. Innovation, creativity, and progress thrive in environments where individuals are free to explore, experiment, and express themselves without fear of state censorship or control.
Moreover, it’s crucial to recognize that true transformation and advancement cannot be achieved within the confines of state-sanctioned limitations. Whether it’s the wisdom of a poet, the bold exploration of pioneers, the groundbreaking discoveries of scientists, the vivid imagination of painters, the visionary planning of urban developers, or the enchanting melodies of musicians, these transformative forces flourish in environments of freedom and openness.
Therefore, it’s imperative that we break free from the constraints imposed by the state and foster an environment of genuine intellectual and creative freedom. Only then can humanity unleash its full potential and chart a course towards a brighter, more innovative future.
Establishing a climate of free thought is crucial for cultivating a society’s intellectual depth, which is essential for fostering innovative actions and unleashing individual creativity. Freedom must remain uncompromised, as restrictions on liberties can inflict lasting traumas on societies, taking generations to overcome. Western societies have faced such experiences; consider Spain, which endured dictatorship until 1975.
To illustrate the lasting impact of such regimes, let’s look at a personal story shared by a Spanish acquaintance. When this person excitedly told their father about being chosen as a representative among PhD students, the father responded with caution. He urged them to avoid drawing attention to themselves, fearing repercussions from authorities or professors that could hinder their academic pursuits. This paternal concern stemmed from his experiences of repression under the dictatorship, where speaking out or seeking justice often led to severe consequences.
The anecdote vividly illustrates how the scars of authoritarianism can linger for generations, shaping individuals’ behaviour and perceptions long after the regime’s end. The father’s apprehension reflects the deep-seated fears and ingrained caution instilled by years of living under oppressive rule. Even after the transition to democracy, the psychological impact endured, highlighting the profound and lasting effects of restricted freedoms on the societal psyche.
This example underscores the importance of safeguarding and promoting freedom of thought and expression as fundamental pillars of a healthy and progressive society. It serves as a poignant reminder of the lasting legacy of past injustices and the necessity of nurturing an environment where individuals feel empowered to voice their opinions and pursue their aspirations without fear of reprisal.
Freedom serves as the cornerstone for nurturing enlightened generations capable of shaping the world. Its absence equates to the stagnation of thought, akin to the deprivation of vital blood flow to the brain, leading to a partial or metaphorical paralysis. A society trapped by walls of fear perceives life through a lens of anxiety, lacking self-assurance and hesitating to express itself. Such a society cannot aspire to lead the world effectively.
The Universal Declaration of Human Rights clearly underscores the importance of safeguarding the rights and freedoms of individuals. We don’t need to create new principles; the Magna Carta, signed 800 years ago, was a pivotal moment in history, marking the collapse of oppressive governance in the eyes of the British crown. These historical documents contain a powerful essence capable of shaping societies into works of art, where freedoms are interwoven with the art of communal living. Yet, in the contemporary era, these values are not upheld as they ought to be across all regions.
There is a pressing need for skilled thinkers who can use this powerful idea and weave it into society. These individuals, like artists, must sew the threads of freedom and coexistence deeply into our collective awareness. Unfortunately, in today’s world, these values do not get the recognition they deserve, showing a big gap in our global conversation.
It is crucial that we urgently focus on creating a society where everyone can live together harmoniously. We must teach children from a young age how to live together peacefully. It is wonderful to see a diverse humanity, where people of different colours, races, languages, and religions come together. Yet, we must fully embrace the principles of a civil constitution that supports the representation of diverse perspectives in government and parliament.
How unfortunate it is that some people still struggle to express themselves in their native language, create their own schools, or celebrate their cultural heritage through song. The essence that sustains and enriches our collective existence is like the life-giving marrow within bones.
In a recent conversation with a Dutch friend, I used the phrase “tolerate differences”. However, my friend rightly pointed out that merely tolerating differences implies a grudging acceptance, rather than a genuine celebration of diversity. The key to fostering lasting harmony lies in this deeper understanding – one that goes beyond mere tolerance to embrace a sincere acceptance of each other’s inherent worth and uniqueness. Therefore, the foundation for sustainable coexistence rests upon our ability to find common ground, uphold shared principles, and genuinely embrace one another as equals, with mutual respect and understanding.
If we lacked any historical context, the events happening in the world today would still make us think deeply. Recently, I visited Helmstedt, a charming German town on the outskirts. While sitting in a local café and talking with a German resident, they learnt about my academic background and eagerly took me to the University of Helmstedt. Once a centre of scientific study, it is now closed and turned into an art gallery. Founded in 1576, this institution was once a hub of intellectual activity, nurturing great minds like Gauss, whose work had a significant impact throughout the 19th century. The very room where Gauss wrote his important doctoral dissertation remains unchanged, silently showcasing the wisdom of the past.
Yet, as one walks through the halls of this esteemed institution, one cannot help but ponder the unpredictability of fate. What caused the decline of this respected centre of learning, which for centuries nurtured minds that shaped human civilisation? The story is filled with irony and tragedy. Consider the fate of the young Professor Giordano Bruno, born in 1548, who dared to propose philosophical ideas known as Cosmic Pluralism. His bold theories, which went against the prevailing Christian beliefs, led to his tragic end at the hands of the Roman Inquisition; he was burnt at the stake before he reached the age of fifty.
Describing the stark contrast between the Middle Ages and today is a challenging task in the 21st century. Until very recently, we know that women did not have the right to study or work, even in the Western world. In England, which hosted the Industrial Revolution, many universities did not allow female students to study until relatively recent times. When we visited the Beamish Museum in England, a presentation there mentioned a detail that was still occurring in our century: girls’ teeth were being completely removed and replaced with dentures so they could marry wealthier and more affluent men. The fact that this practice continued until very recently made me reflect deeply. The West has emerged from its dark historical past, with its capitals now serving as vibrant hubs of freedom, welcoming people of diverse religions, languages, and races. These cities, once shrouded in darkness, now have well-lit streets where no one feels lost or threatened. The shift from historical darkness to a reality based on the rule of law and universally recognised human rights standards serves as a beacon, guiding these cities towards progress and inclusivity.
This transformation is evident in recent assessments such as the Rule of Law Index, where European and Scandinavian countries consistently occupy top positions. These nations have not only embraced the principles of the rule of law but have also integrated them into their legal systems, ensuring equal protection and access to justice for all citizens. This commitment to upholding legal standards has contributed to the establishment of stable and prosperous societies, where the rights and dignity of every individual are respected and upheld.
Furthermore, beyond statistical rankings, the tangible effects of this progress are evident in the everyday lives of citizens. From strong legal frameworks protecting civil liberties to institutions dedicated to upholding justice and accountability, these countries have created environments that foster social harmony and economic prosperity. As a result, their cities stand as shining examples of the triumph of enlightenment over darkness, inspiring hope for a brighter future globally.
Every day, governments around the world may introduce new judicial packages and craft eloquent legal doctrines, but their effectiveness lies in real-world implementation, not just rhetoric. Merely having a large set of laws and regulations, or impressive buildings of justice, does little to uphold the rule of law if those laws are not effectively enforced or if legal principles are not deeply ingrained within society. True legal systems are defined not by the quantity of legislation but by the quality of their execution.
Consider nations without a written constitution; despite lacking formal legal documents, they may excel in upholding human rights and the rule of law through practical application. This highlights the importance of embodying legal values in societal norms and practices rather than relying solely on written laws.
The essence of law lies in its application by skilled jurists who are not only well-trained but also deeply committed to the principles of justice and the rule of law. These jurists must uphold universal values, possess a broad perspective, and remain free from political pressures. Only through the dedication of such individuals can the foundation of a just and fair legal system be laid, fostering a society where the rule of law prevails.
*ADD TABLES*
While Russia’s exact ranking in the 2024 Rule of Law Index is not specified in the available summaries, various credible reports indicate a significant deterioration in the country’s adherence to the rule of law. Notably, Russia was ranked 154th out of 180 countries in Transparency International’s 2024 Corruption Perceptions Index, marking its lowest score ever. The political landscape has also seen increased repression. A United Nations expert reported that state repression in Russia has intensified since the invasion of Ukraine, with over 1,300 political prisoners detained on fabricated charges. The country is described as being governed by a system of fear and punishment, including the use of torture with impunity.
On the other hand, China is ranked 95th among the countries assessed, with a score of 0.47, showing its relative standing in following the rule of law based on the index’s criteria. In contrast, Hong Kong SAR, a special administrative region of China, is ranked 23rd globally with a score of 0.72. This higher ranking suggests a stronger adherence to rule of law principles in Hong Kong compared to mainland China. The difference in economic development between countries like South Korea and North Korea raises important questions about the reasons for such a gap. The historical context of Korea’s division into two states in 1953 clearly shows this difference. Initially, both North and South Korea started with similar per capita income. However, over time, South Korea’s per capita income has risen to $30,000, while North Korea’s is only $1,700.
The key factor that led to the significant difference between the two Koreas was the series of legal reforms in South Korea, especially those related to property rights, which were successfully implemented. These reforms paved the way for South Korea’s economic transformation, leading to growth and prosperity since the 1970s.
Similarly, China’s economic rise over the past few decades provides another strong example. Despite many challenges, including a large population and initially low levels of development, China began economic reforms, particularly with the regulation of property rights after Mao’s death. This change sparked China’s impressive economic growth, using its vast labour force to become a global economic powerhouse.
However, it’s important to recognise that economic progress alone does not ensure long-term prosperity. Like South Korea, China still faces significant issues related to democracy, human rights, the rule of law, and freedoms. Addressing these challenges will be crucial for China to sustain its economic growth and go beyond just achieving an average per capita income.
The experiences of South Korea and China highlight the critical role of legal and institutional reforms in driving economic development. However, sustainable progress requires a comprehensive approach that includes not just economic growth but also addresses broader societal and governance issues. Only by tackling these challenges can countries truly achieve long-term prosperity and become the success stories of the future.
To gain insight into the trajectory of this effort, it’s helpful to examine the Economic Freedom Index, an annual report by the Heritage Foundation. This index covers various factors, including the rule of law, protection of property rights, government intervention in the economy, freedom in business and finance, and integration into global markets through trade and finance.
Among the top ten countries in this index, we find examples of strong economic systems where these factors are well-maintained and encouraged. Conversely, China, despite its economic strength, ranks relatively low at 100th place, indicating areas for further improvement. The stark contrast becomes clear when we look at nations like North Korea and Venezuela, which are at the bottom of the index.
The disparity between countries at the top and bottom of the index highlights the importance of these factors in shaping economic activity. A healthy economy is characterised not only by its structure but also by its effectiveness and efficiency.
To illustrate this difference further, let’s compare starting a business in Venezuela to a country at the top of the index. In Venezuela, the bureaucratic process involves navigating through a lengthy 17-step procedure, often taking over 100 days to establish a business. In contrast, in top-ranking countries, starting a business is streamlined and efficient, often requiring just a simple online form submission followed by quick activation.
This difference in ease of doing business highlights the significant impact of economic freedom on entrepreneurship and economic development. Countries with greater economic freedom tend to have more dynamic and vibrant business environments, fostering innovation, investment, and economic growth.
Three-column table listing rank, country, and score in the 2024 Index of Economic Freedom.
| Rank | Country | Score |
|---|---|---|
| 1 | Singapore | 89.1 |
| 2 | Hong Kong | 89.1 |
| 3 | New Zealand | 84.1 |
| 4 | Switzerland | 82.0 |
| 5 | Ireland | 80.9 |
| 6 | Australia | 80.9 |
| 7 | Denmark | 80.4 |
| 8 | United Kingdom | 79.3 |
| 9 | Canada | 79.2 |
| 10 | Estonia | 78.2 |
| 11 | United Arab Emirates | 76.2 |
| 12 | Taiwan | 77.1 |
| 13 | Iceland | 77.1 |
| 14 | Georgia | 77.1 |
| 15 | Netherlands | 77.0 |
| 16 | Lithuania | 76.9 |
| 17 | Luxembourg | 76.7 |
| 18 | Finland | 75.7 |
| 19 | Malaysia | 74.7 |
| 20 | Germany | 74.5 |
Three-column table listing rank, country, and score in the 2024 Index of Economic Freedom. Lower scores indicate less economic freedom.
| Rank | Country | Score |
|---|---|---|
| 157 | Sudan | 45.0 |
| 158 | Zimbabwe | 43.1 |
| 159 | Bolivia | 42.8 |
| 160 | Iran | 49.2 |
| 161 | Algeria | 46.2 |
| 162 | Timor-Leste | 45.9 |
| 163 | Equatorial Guinea | 45.0 |
| 164 | Eritrea | 44.8 |
| 165 | Republic of Congo | 44.7 |
| 166 | Cuba | 44.6 |
| 167 | Venezuela | 25.2 |
| 168 | North Korea | 5.2 |
| 169 | Turkmenistan | 46.4 |
| 170 | Central African Republic | 45.6 |
| 171 | Chad | 45.4 |
| 172 | Guinea | 45.3 |
| 173 | Guinea-Bissau | 45.2 |
| 174 | Haiti | 45.1 |
| 175 | Libya | 45.0 |
| 176 | Syria | 43.5 |
In today’s fast-paced world, characterised by rapid digital connectivity, nations hindered by bureaucratic barriers risk falling significantly behind. Many countries resist integrating into the global community, clinging to outdated practices. The sustainability of this resistance is uncertain, especially for countries like China and India, which strive to emulate successful development models.
A nation stuck in an economy reliant on imitation faces considerable challenges. While initially beneficial for learning and adaptation, excessive reliance on imitation stifles innovation and limits progress. Countries that successfully transition from imitation-based economies to innovation-driven ones make significant strides toward securing their future. Today, embracing values such as the rule of law, property rights, human rights, and freedom of thought is essential for nations aspiring to move beyond the limitations of imitation.
Moreover, prioritising research and development activities to harness the potential of a well-educated populace is crucial for enhancing productivity and competitiveness globally. Transitioning from an imitation-based economy to one grounded in innovation is essential for countries seeking sustained growth and relevance in an ever-evolving global landscape.
In many developing countries, the allocation of funds for research and development is less than one percent of the national income, significantly below the OECD average of 2.4 percent. In contrast, South Korea, known for its strong research and development initiatives, invests 4.9 per cent of its national income in this sector. As a result, South Korea has consistently topped global innovation rankings for the past six years. This stark contrast highlights the need for underdeveloped countries to move from a culture of imitation to one of innovation, thereby rising to the levels of global leadership.
Particularly in the current economic landscape, elevating the nation’s living standards requires the development of sectors focused on high-value-added production. This transformation cannot happen spontaneously; it demands strategic improvements in research and development infrastructure. By undertaking rigorous and effective research and development efforts, a nation can position itself as a strong competitor on the global stage.
South Korea’s relentless pursuit of innovation has propelled it to the forefront, with other nations striving to emulate its success. Notably, in 2019, Germany made significant strides in the innovation index, closing in on South Korea’s lead to much applause. In a remarkable turn of events, Germany claimed the title of innovation champion in the 2020 index, ending South Korea’s six-year reign. By 2024, Switzerland leads the ranking, with Sweden, the United States, , Singapore and the United Kingdom following in succession. This shift in leadership highlights the dynamic nature of the global innovation landscape and underscores the importance of sustained investment and commitment to research and development for maintaining competitiveness and driving progress.
Three-column table listing rank, country, and score in the 2024 Global Innovation Index.
| Rank | Country | Score |
|---|---|---|
| 1 | Switzerland | 67.5 |
| 2 | Sweden | 64.5 |
| 3 | United States | 62.4 |
| 4 | Singapore | 61.2 |
| 5 | United Kingdom | 61.0 |
| 6 | South Korea | 60.9 |
| 7 | Finland | 59.4 |
| 8 | Netherlands | 58.8 |
| 9 | Germany | 58.1 |
| 10 | Denmark | 57.1 |
| 11 | China | 56.3 |
| 12 | France | 55.4 |
| 13 | Japan | 54.1 |
| 14 | Canada | 52.9 |
| 15 | Israel | 52.7 |
| 16 | Estonia | 52.3 |
| 17 | Austria | 50.3 |
| 18 | Hong Kong | 50.1 |
| 19 | Ireland | 50.0 |
| 20 | Luxembourg | 49.1 |
Nations that excel in innovation deeply embed key societal values such as democracy, human rights, the rule of law, and free speech. This foundational ethos fosters an environment conducive to living together harmoniously. Within this framework, the state acts as a facilitator, creating a platform where citizens collectively establish and adhere to the principles guiding their coexistence. This collaborative approach is central to building a society where innovative actions thrive, supported by a commitment to shared values and mutual respect. Society faces a crucial challenge: overcoming its pervasive fears and embracing a culture of risk-taking, especially in encouraging children to explore areas where their talents and creativity can flourish.
In societies worried about the future, people often choose jobs they think are stable, usually in government roles. This cautious mindset stops innovation and hurts a society’s ability to compete globally. Without taking risks, trying new ideas, and challenging the usual way of doing things, progress slows down and chances for innovation fade. To grow and move forward, societies need to value and encourage taking risks. This is important for nurturing the next generation of creative thinkers. When people feel confident to follow their passions and take smart risks, they are more likely to come up with new ideas and make meaningful changes. By promoting risk-taking and a culture of innovation from a young age, societies can reach their full potential and stay competitive in a constantly changing world.
To truly flourish in today’s world, societies must confront these fears head-on and create environments that nurture creative thinking and an entrepreneurial spirit. This means empowering parents to guide their children toward paths that may seem riskier but align with their natural talents and passions. When individuals are encouraged to pursue their strengths rather than conform to traditional ideas of success, they are more likely to excel and contribute to creating high-value products and solutions.
Furthermore, it’s important to recognise the harmful impact of environments characterised by oppression and fear. Societies where individuals face abuse and coercion, whether at home, in schools, or by state authorities, are unlikely to foster the self-confidence and creativity necessary for innovation and progress. Therefore, investing in supportive environments that prioritize individual well-being and personal growth is essential.
In many underdeveloped countries, societal pressure discourages children from pursuing interests in music and art, viewing them as distractions from academic studies. For instance, a child might have a natural talent for painting, but societal norms emphasising subjects like mathematics might steer them towards a career path that doesn’t align with their true abilities. This highlights a larger issue where individuals are often judged and directed based on perceived weaknesses rather than recognised strengths.
Moreover, this phenomenon extends beyond childhood into education and career choices. Teachers may be assigned to subjects based on their perceived weaknesses rather than their strengths For example, a child with a talent for painting should ideally receive professional training to nurture their skills. However, in many cases, the focus is placed on their weaker areas – such as mathematics – by providing extra support in that subject instead. As a result, their artistic potential may go underdeveloped while efforts are concentrated on improving their weaknesses rather than fostering their strengths.
The societal emphasis on traditional, stable career paths further exacerbates the issue. A poignant illustration of this is depicted in a cartoon where a father, representing the conservative mindset prevalent in many societies, disapproves of his son’s invention of a time machine. The father’s concern stems from his belief that his son should focus on securing a stable job rather than pursuing unconventional ideas like time travel. This highlights the narrow mindset that often permeates societies, stifling creativity and innovation in favour of conformity to established norms.
In essence, the societal pressure to conform to traditional expectations hampers the exploration of individual talents and passions, ultimately limiting the potential for personal fulfilment and societal progress. Encouraging a more inclusive and supportive environment that values diverse talents and interests could unlock untapped potential and foster greater innovation and creativity within underdeveloped countries.