![]() We need to focus on building the institutions that address these failures at scale to help developing countries navigate the very high uncertainty brought by all this technological change.Īllow me to sum up my argument in six sub-statements. Persistent market failures and high search and discovery costs, coordination costs or indivisibilities make it especially hard for entrepreneurs in developing countries to try out new business models or technologies. we are setting aside enough resources to enable experimentation.formal knowledge is being disseminated at the right level of detail or modularity for the society to engage with it in a meaningful way, and.the right market-supporting institutions are in place,.So rather than predicting the trajectories of physical technological change, the discussion should be far more about figuring out whether: This is not so much due to the characteristics of the physical technologies, but because we cannot imagine what the social arrangements, institutions and regulations and the broader infrastructure will be needed in the new paradigm. The challenge with a paradigm shift is that it is often only retrospectively coherent - you cannot see from the current prevailing performance curve what an entirely new curve might look like. When people talk about the Fourth Industrial Revolution, they are often implying a single paradigm shift or several paradigm shifts taking place simultaneously. The old way of doing things is suddenly broadly understood to be sub-optimal and inefficient. ![]() Kuhn argued that when a paradigm shift occurs, entirely new methods, arrangements and ways of measuring performance are adopted. He described it as a fundamental change in the underlying concepts and practices of a scientific discipline. Kuhn (1922-96), a highly regarded philosopher of science. The phrase "paradigm shift" was popularized in the writings of Thomas S. While physical technologies appear to develop exponentially, public organizations and social institutions develop linearly. ![]() Social institutions are being stressed because emergent technologies enable far more decentralized and rapid decision making, whereas public institutions are often slow, centralized and conservative. And their biggest impact is not the physical technological change, but the increasing pressure that they exert on the social institutions in our societies. Rather, it seems to me that many smaller mini-revolutions are taking place in certain domains. ![]() I am not altogether convinced that we are facing the next single, huge, overarching industrial revolution. While I appreciate the fantastic resources made available by the World Economic Forum, I do not fully buy into the concept of the Fourth Industrial Revolution as popularized by the WEF and so many techno-enthusiasts. Some believe that we may be on the cusp of the great Fourth Industrial Revolution that will determine the answers to these questions. How will new technologies affect the regions and value chains we work with? How will developing countries participate in global value chains and trade systems? What kind of skills will the workforce need? As economic development practitioners, we often wonder how emerging technological and social changes might affect the people we work with.
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