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The world's poorest nations must place more emphasis on using scientific knowledge and technological innovation if they wish to escape the poverty and growing unemployment they currently face, according to a leading UN agency.

The warning comes in a major report ― 'The Least Developed Countries Report 2007: Knowledge, Technology Learning and Innovation for Development' ― published yesterday (19 July) by the United Nations Conference on Trade and Development (UNCTAD), based in Geneva.

The report says that too many of the world's least developed countries (LDCs) are seeking to achieve economic growth, for example, through higher commodity prices, without asking how effective the growth is likely to be in meeting important social targets, such as raising agricultural productivity or tackling unemployment.

It recommends a range of measures for reversing this situation, from encouraging "technological learning" in both "farms and firms", to making better use of international legislation on intellectual property rights, and encouraging donors to increase support for what it describes as "knowledge aid".

"Unless the LDCs adopt policies to stimulate technological catch-up with the rest of the world, they will continue to fall behind other countries technologically, and face deepening marginalisation in the global economy," says UNCTAD secretary-general Supachai Panitchpakdi.

The report argues that LDCs require both capital and knowledge to build up their productive capabilities. But it adds that current debates on development policy place too much emphasis on finance, and not enough on knowledge.

It identifies this as a particular weakness of many Poverty Reduction Strategy Papers (PRSPs), the multi-year plans that developing countries have to draw up and adopt as a pre-condition of support from funding agencies such as the World Bank.

"The latest generation of PRSPs seeks to reduce poverty through sustained economic growth," Charles Gore, chief of research and policy analysis in the division for Africa, LDCs and special programmes, said at a press conference in London. "But technical change is not identified as a priority within PRSPs. That is a long-standing neglect."

The report also points out that donor aid for science, technology and innovation is very weak, both qualitatively and quantitatively.

For example, during 2003–2005, annual spending on promoting research and boosting advanced skills represented less than four per cent of the total aid to LDCs and almost 60 per cent of that was spent on higher education.

Similarly, although agriculture remains the principal source of livelihood in LDCs, spending on agricultural research has fallen from 1.2 per cent of agricultural gross national product in the late 1980s to less than 0.5 per cent today.

In contrast, US$1.3 billion was allocated by donors to improving governance in LDCs during 2003–2005, compared to only US$12 million on providing advice to farmers through agricultural extension services.

Link to full UNCTAD report: 'The Least Developed Countries Report 2007: Knowledge, Technology Learning and Innovation for Development'