Policymakers around the world are increasingly emphasizing the centrality of knowledge, particularly research and development and other activities to promote scientific and technological progress, in national economic growth and competitiveness.Economic globalization has led to the rise of new global knowledge and technology-intensive industries (KTI industries).The KTI industry, especially in the service and manufacturing sectors, is increasingly prominent in the global, regional and national economies.KTI industries are 10 industries classified by the Organization for Economic Cooperation and Development (OECD) with strong links to technology.Based on this classified statistical analysis, the researchers can track global trends in KTI industry development.While the United States remains the leader in KTI, China, India, Brazil and other developing economies are actively pursuing national innovation policies and are striving to become major producers and exporters of KTI goods and services.Advances in science and technology have enabled companies around the world to expand their KTI activities to more locations around the world and to develop stronger interconnections with geographically distant entities.
The KTI industry (commercial KI services, public KI services, and HT manufacturing) (Note: KI = knowledge-intensive, HT = high technology) is a major part of the global economy, accounting for 27% of world GDP.Among KTI industries, the commercial KI services sector (corporate, financial and communications) has the highest share (16 percent of GDP).Public KI services (education and health) accounted for the second largest share (9 percent of GDP).HT manufacturing (aeronautics, communications, computers, pharmaceuticals, semiconductors, and test measurement and control instruments) is much smaller, accounting for only 2% of global GDP.
Overall, KTI's share of the world economy remained roughly the same between 1997 and 2012.In the KTI classification, the share of commercial KI services increased by 1% to 16%.The expansion of commercial KI services reflects the continued movement of advanced economies to services and the tendency of businesses and other organizations to purchase different services, which has stimulated the growth of the business services industry.In developing economies, rapid economic growth and higher per capita incomes have spurred demand for a variety of services, including business KI services such as communications and financial services.The share of public KI services remained stable at 9% between 1997 and 2012.Growth in education and health is accompanied by growth in world GDP due to increased demand for education and health services, aging populations in many countries, and other demographic and technological advances such as online education and e-health records.But during that time, HT manufacturing fell by 1 percent to 2 percent.
The reason why KTI in developed economies is much higher than in developing economies is because it has a much higher proportion of KI services.The share of KTI varies widely among advanced economies: the United States has the largest share of KTI among all advanced economies (40%), followed by Australia (39%) and the United Kingdom (36%).These countries have a large share of KI services, especially in commercial KI services (22-28%).Business KI services are higher in Australia and the United States, in part because they account for a higher share of financial services compared to other advanced economies (14 per cent and 8 per cent, respectively).The EU, Japan, Canada, and South Korea account for 29-30% of KTI, and their commercial KI services sector is much smaller than that of the United States (14%-18% vs. 24%).The EU and South Korea have a smaller share of financial services (5%–7%), compared to Australia and the United States.
Between 1997 and 2012, the share of KTI in advanced economies increased from 29% to 32% due to the growth of corporate and public KI services.The share of HT manufacturing fell from 3% to 2%.This means that the trend in advanced economies is towards a sustained shift from manufacturing to services.In the developed economies, the share of KTI increased by 6-9 percentage points between 1997 and 2012, in Australia and the United Kingdom by 39-40 percent and 36 percent; in the United States, KTI grew by 7 to 8 percent; and in Japan by 3 percent to 30 percent and 29 percent.
The share of KTI in developing economies is much lower than in advanced economies, mainly due to its smaller share of KI services.The proportion of KTI in each developing country is very different, reflecting the difference between their stage of development and the level of per capita income.Among the larger developing countries, Turkey has a relatively high per capita income, with the highest KTI share (23 per cent).The other five countries (Brazil, China, India, Mexico and South Africa) have KTI in the range of 19-21%.Indonesia has the lowest KTI among all developing economies (14 percent).
Between 1997 and 2012, the KTI share of developing countries as a whole slowly increased from 18 per cent to 20 per cent.The share of commercial KI increased slightly from 11% to 12%; public KI services and KI services, as well as HT and non-HT manufacturing, remained flat.The share of agriculture, construction mining and electricity in many developing countries has grown considerably, reflecting the continued importance of resource extraction to their economies and the growing international and domestic demand for food, energy and minerals.Trends vary widely across developing countries: Turkey's KTI share grew the most among larger developing countries, by 7 percent to 23 percent, most of which occurred in the commercial KI services sector.Mexico's KTI share increased by 5 percent to 21 percent, and its HT manufacturing share fell from 2 percent to 1 percent due to the growth of its commercial KI services sector.China's KTI grew 3 percent to 20 percent, driven by its emergence as the world's leading producer of electronics, fueling growth in its HT manufacturing sector.India's KTI share grew from 16% to 19% due to the growth of its commercial KI services sector.