Chapter 4: Is Productivity Growth Shared in a Globalized Economy?

Technology is a key driver of improvements in income and standard of living. Historically, technological developments have been concentrated in a few large industrialized economies. Therefore, the way technology diffuses across countries is central to how global growth is generated and shared across countries. Globalization has likely changed the diffusion process, with a large body of literature highlighting the importance of trade and foreign direct investment. Against this background, this chapter takes a closer look at the process of international technology diffusion. It examines whether globalization means that knowledge from technology leaders is spreading faster than it used to, and how this impacts the capacity of other economies to innovate and be more productive.