The shift towards digitalisation and knowledge-based economies highlights the increasing importance of innovation and technology to economic growth, observed the World Trade Organization (WTO) in its latest world trade report.
The ‘World Trade Report 2020: Government policies to promote innovation in the digital age,’ released by the WTO this (Monday) evening (Bangladesh time), argued that in the context of ‘new industrial policies' and related policies geared towards innovation, and the transition towards the digital economy, some of these strategies can have spill-overs for other countries.
The positive spill-overs are growth generation, new market creation and encouragement of technology diffusion. The negative spill-overs are, however, trade distortion, investment diversion or promotion of unfair competition.
The report also said that domestic economic fallout linked to the Covid-19 pandemic is leading countries to strengthen the policies aimed at boosting growth through innovation and technological upgrading.
Referring to governments’ direct funding and indirect financial support to stimulate demand for and use of Information and Communication Technology (ICT), the report mentioned that between 2014 and 2016, eight Least Developed Countries (LDCs) reduced taxes on ICT services.
These are specific Value Added Tax (VAT) on SMS, data or calls, connection tax, or SIM card tax and the countries are Angola, Bangladesh, the Democratic Republic of the Congo, Mauritania, Nepal, Niger, Senegal and Uganda.
The report deeply discusses: (i) innovation-oriented government policies and their evolution in the digital age; (ii) innovation policy, trade and the digital challenge; (iii) innovation policy, trade and the digital challenge; and (iv) international cooperation on innovation policies in the digital age.
It is the 18th version of the world trade report, one of the WTO’s annual flagship publications. The first world trade report was published in 2003 focusing on ‘trade and development.’
The world trade report of the multilateral trade body ‘aims to deepen understanding about trends in trade, trade policy issues and the multilateral trading system.’