4 - Modern economic growth and the less developed countries

Summary

In thinking of the impressive record of Taiwan's economic growth over the last three decades, to be documented and discussed in the papers for this Conference, I was tempted to reflect on the conditions that permit and induce such a performance in an LDC. One such condition is indicated by the existence of the more developed countries, with their demonstrated contribution of modern economic growth to the great increase in product per capita or per worker – for it indicates the existence of a technological backlog, the exploitation of which could generate accelerated advance elsewhere. The characteristics of modern economic growth are thus important in both helping us to identify the LDCs, and in enabling us to infer, if only tentatively, the kinds of breakthrough that can initiate and sustain a high rate of growth in an LDC – after a long period of stagnation or of moderate advance.

Distinctive characteristics of modern economic growth

The basic feature of modern economic growth, as it has been observed in the more developed countries since the late 18th century, is that the rise in per capita or per worker product was associated largely with extended application of a growing stock of useful knowledge, via technological innovations in production.