Technological Achievements and Economic Development: The Significance of Technological Achievement Gap in Selected East and South Asian Countries

Although technological progress is considered a key element for economic growth and development of a country, strong empirical evidence in this regard is not available yet. Therefore, to establish the empirical link between technology progress and economic development, it is advisable to carry out a time series analysis. In this regard, the Technology Achievement Index (TAI) of 100 top economies has been developed to examine the position of countries' technological progress for the 21 years spanning 1995 to 2015. Countries have been ranked on their TAI which is based on four pillars; technology creation, diffusion of older innovations, diffusion of recent innovations, and development of human skills. As well, this current study re-calculates the Humane Development Index (HDI) of 100 top economies for the 21 years from 1995 to 2015. Ranking of countries' HDI values reflects three dimensions: A long lifespan (life expectancy index), knowledge (Education Index) and a decent standard of living (Gross National Income Index, or GNI). The Standard Deviation (SD) technique has been used to investigate the technological gap between individual countries and groups of countries or regions. For a more meaningful assessment, technological gaps from the maximum achievement value (i.e., one of the countries under study) are presented as well. To investigate the impact of technological progress on economic development, this study introduces a model in which the HDI is used as the dependent variable and the TAI and Gross Capital Formation (GCF) are used as independent variables. The HDI, TAI and GCF are used in this model as proxy variables for economic development, technological progress and capital respectively. Econometric techniques have been used to show the impact of technological progress on economic development. The results show that long-term associations exist between technology progress and economic development; the impact of technology progress on economic development is 13.2% while the impact is 4.3% higher in eight selected East South Asian countries, at 13.5%, than in eight selected highly developed countries (9.2%).