Center for Strategic and International Studies: The Need for a Leapfrog Strategy
According to traditional theories of development, the path to prosperity for emerging economies is to follow in the tracks of developed nations. The theory goes that if countries wish to become wealthier, they should simply commit to following the same series of steps that allowed developed economies to prosper. Through modernization, urbanization, and industrialization, this "catch-up" theory of development translates into a sequential process of investment in skills, production capacity, and design technologies that allow developing nations to move through the same stages of development. This process would eventually narrow the income gap and delivering new wealth for their citizens. In recent years, however, an alternative theory of "leapfrog" development has been growing in popularity as the development community has searched for new ways to leverage technological progress to drive growth and help emerging economies avoid the so-called "middle-income trap."
Leapfrogging occurs when a nation bypasses traditional stages of development to either jump directly to the latest technologies (stage-skipping) or explore an alternative path of technological development involving emerging technologies with new benefits and new opportunities (path-creating). Probably the most famous and regularly cited instance of stage-skipping is the mobile revolution, which put phones in the hands of millions of people while allowing developing nations to skip directly to mobile phones without the need to invest in landline infrastructure. The opportunities of path-creating leapfrogging, on the other hand, are exemplified by the explosion of mobile payment systems and digital banking apps in the developing world. These new services have dramatically expanded access to financial services while allowing emerging economies to chart an alternative, superior path to the credit card-based systems that still dominate in most developed nations.
The concept of leapfrogging has become a popular subject of discussion within the international development community as a potential solution to development challenges in both low and middle-income nations. According to one 2017
For these reasons, policymakers in developing nations have begun to see leapfrogging as a possible strategy for driving growth in their countries. In 2017, Elioda Tumwesigye,
Rethink the Strategy
It is clear that developing countries see their future in science and technology-driven industries, not in traditional foreign aid. In recent years, bilateral donor agencies the
Those nations that have explicitly included leapfrogging as a goal in their science and technology strategies often frame it in broad terms rather than as a tangible roadmap and strategy to drive economic development. In addition, these strategies tend to focus exclusively on enabling stage-skipping leapfrogging. An example is the case of
In this framing, the ambition of leapfrog development is limited to simply passing over the need for a country to invest in low-value manufacturing on their way toward building a high-tech, modern economy. These goals can be useful, insofar as they often lead to an emphasis on investing in education, R&D, strong governance, intellectual property protection, and infrastructure development. However, they are still ultimately catch-up strategies at heart. They still assume that the economic configuration of developed nations is the target to aim for. In some cases, they are looking to copy and paste
This lack of clear strategy is a missed opportunity. There is tremendous potential for leapfrogging to drive growth if done correctly. Developing nations have latecomer advantages over more developed countries when it comes to technology adoption. The lack of legacy infrastructure and entrenched vested interests could allow for the rapid adoption of emerging technologies, especially compared to developed nations that are forced to follow more incremental transition plans. This flexibility could allow developing nations to plan their policies, innovation ecosystems, and infrastructure with emerging technologies in mind from the start. This approach would speed their transition to more efficient systems and provide their entrepreneurs an early opportunity to become a part of the value chain that will grow up around those innovations.
Lessons from Successful Leapfrogging
Even in the absence of explicit leapfrogging strategies, a number of countries have already seen success in supporting leapfrog development. These countries have taken advantage of innovative business models and flexible regulatory approaches to encourage growth. These instances can provide lessons for understanding the enabling conditions necessary for leapfrog development to succeed and how other countries can build strategies that will help create the conditions for growth.
The first example is the case of leapfrogging's poster child: mobile money. When M-Pesa--the now-ubiquitous African mobile payment system--first emerged in
Another example can be found in
Pitfalls to Avoid
Despite these successes, we must be careful not to misunderstand the way leapfrogging can contribute to countries' economic development. Enthusiasm for taking advantage of leapfrog opportunities should not distract developing nations from what should be their overarching goal: becoming producers in their own right, rather than simply consumers of technologies and services developed elsewhere. Leapfrogging has not always served this purpose.
The excitement surrounding past examples of leapfrogging is well deserved. But if these bursts of leapfrog activity are not supported by policies that translate those opportunities into sustainable growth, then the jump will have been for nothing. The late professor Calestous Juma, who chaired the
Some elements of economic development cannot be skipped over with new technology. Nations still need to provide the core infrastructure necessary for growth, like education, internet access, roads, plumbing, and electricity, in addition to strong social institutions. Distributed solar generation may light health clinics and charge phones, but it won't be enough on its own to power the industrial machinery or office parks that will bring growth. Telehealth may expand access to some medical services but will not replace the need for sustained investment in public health infrastructure. Developing nations must avoid foregoing investments in infrastructure, R&D, and human capital in pursuit of short-term solutionism. Similarly, developing nations should not see new technologies as replacements for strong social institutions bound together by social capital and public trust. No technology will ever be able to replace the laws, norms, and institutions that provide the foundation for political stability.
Developing nations should also avoid an approach to leapfrogging that starts with a solution, and then tries to find problems to apply it to. Emerging technologies hold great potential but will not be appropriate in every circumstance. A strategy to use networked cameras to improve traffic management won't make sense if cities are struggling to even install traffic lights or enforce basic traffic laws. Investments in autonomous vehicles or advanced robotics for manufacturing may not work for developing nations whose comparative advantages lie in low labor costs. The better way to approach leapfrogging is to start with development gaps, and then ask how new technologies may be able to help solve them.
The Way Forward
Leapfrogging should be viewed for what it is: an enabler of sustainable development rather than a solution to all development challenges in emerging economies. When properly supported by a robust and dynamic innovation ecosystem and good governance, leapfrog development can have transformative effects. But the leapfrogging itself is only one piece of the puzzle. The question for policymakers, in that case, is twofold: how can countries enable leapfrog development, and how can they ensure that leapfrogging produces real value? Policymakers in developing nations currently lack a framework for thinking through both of these issues.
Hints at the answer to the first question can be seen in the successes of countries like
However, a comprehensive leapfrog strategy must be about more than regulators simply getting out of the way.
The question of ensuring that leapfrogging produces value is a more challenging one, but many countries are coming to realize the importance of supporting technology leapfrogging with robust innovation policies.
These insights help point toward the outlines of an eventual strategy for enabling leapfrog development, but there is still much that remains unknown. There is a need for technologists, development experts, and policymakers to come together to evaluate past instances of leapfrogging and explore emerging technologies that could hold disruptive potential for developing economies in the future. These insights should inform context-specific strategies that will help policymakers identify the conditions for leapfrog development, build flexible policies that enable innovation to succeed and scale, and respond to new technology trends in ways that encourage adoption and value creation.
Erol Yayboke is the deputy director and a senior fellow with the Project on
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